CREJ

Page 2 — Health Care & Senior Housing Quarterly — July 2021 www.crej.com S hifting demographics are driv- ing the health care and senior housing markets, according to articles within this issue. More simply put, aging baby boom- ers increasingly will drive demand for both asset types. The medical office segment, which did better than most property types during the pandemic, is in a position of strength, according to Marcus & Millichap’s Medical Office Midyear Out- look. A big part of that reason is an anticipated boost in demand in the short and long terms for health services. This year, the number of people 65 and older will increase by 3%, accounting for roughly 20% of the nation’s popula- tion. “The 65-and-older community already accounts for 36% of all health spending as they tend to have more routine appointments, preventative screenings and in-patient procedures than younger age groups,” the report states. However, recognizing the popula- tion is aging doesn’t simply mean all health care projects will be success- ful. For that, the numbers need to be examined more closely. This issue’s cover story highlights the need for upgrades and new properties in rural America, as many of those facilities are 40 to 50 years old and can’t stay current with medical developments needed to care for their aging resi- dents. A project profile on Page 9 high- lights how a Colorado Springs facility capitalized on its aging population’s anticipated needs to build a hospi- tal as well as an orthopedic medical office building. It is the only hospital in Southern Colorado certified by the Joint Commission, which accredits more than 22,000 health care pro- grams and organizations nationwide, for total hip and knee replacements. The aging boomer population will impact future demand for more senior housing as it is a larger group than previous generations. However, two articles within the senior section stress the importance of attainability and affordability within this sector. “According to a survey by the National Endowment for Financial Education, 59% of boomers still are financially supporting their children ages 18-39 and a report fromVanguard shows that 45% report having no retirement savings,” writes Len Segel on Page 26. Segel goes on to identify strategies development teams should consider when planning their next properties in order to meet increasing demands on tighter budgets. On Page 28, Joshua Thomas focuses on this point as well, highlighting a 2019 report calledThe Forgotten Middle from the National Investment Center for Seniors Housing & Care. “Middle-income” seniors, those who receive between $51,800 and $65,505 annually, will almost double by 2030 to 15 million. He writes that the industry is due for a major disruption to deal with an aging population that has far less money in its elder years than pre- vious generations had. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext.10 4 Aging society drives demand HEALTH CARE 3 4 5 6 Why medical spec suites are a win-win in Denver Anna Heiserman Leverage real estate portfolios to optimize position Becky Baron Joint venture ownership model provides benefits Gene Hodge Embrace disruption instead of forced reinvention Paul Stefanski 7 8 9 10 26 27 28 Reinvent senior living for attainability Len Segel The pandemic’s impact on market fundamentals Lana Peck The growing need for affordability in senior housing Joshua Thomas 29 29 SENIOR HOUSING Letter from the Editor Contents Evidence-based design: More important than ever Trinity Kahn Art programs can promote healing and grounding Danielle Reisman Understand demographics to determine care needs David Martin Creating a new hub for health policy in Colorado Sam Ward and Carmen Schechinger Senior living changes: Lessons from the pandemic Gary Prager Design spaces for seniors of today & tomorrow Bill Foster