Seniors Housing Executive Search Update - Q2 2024

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Seniors Housing Executive Search Update - Q2 2024

shu 2 24

After a 1st Quarter of wild mood swings, it's back to business as usual

4 MIN. READ

Strategic Whiplash

​Back at the NIC Spring Conference in early March, the mood was the most upbeat I have seen at any event in the past few years. The most recent guidance from the Federal Reserve was that there could be six rate cuts in 2024 in response to continued easing of inflationary pressures. Many attendees were expecting that the forced pause on new development would be coming to an end, and I had more than one conversation with companies planning on launching aggressive new platforms. Private equity, which had been playing the long game waiting for distress to force sellers' hands, was anticipating getting back into acquisitions sooner rather than later as owners began capital recycling. All of this was being driven what NIC estimated to be a need for over 800,000 additional units of seniors housing by 2030 requiring an industry-wide investment of $400 billion.[i]

Less than a month later at its March meeting, the Fed opted to hold interest rates steady, signaling a maximum of three cuts for 2024, with none likely before mid-year (many economists expect only one or two late between September-December, and some are foreseeing no cuts until 2025). Industry sentiment and strategies immediately reset to 2023. 

Hiring with a Focus on Asset Preservation

Based on follow-up conversations I've had since the NIC Conference as well as recent search enquiries, it seems like the executive hiring trends that dominated the sector last year will be top-of-mind for seniors housing leaders for the remainder of 2024.

Strategic asset and property management continues to be the primary driver of senior level hiring this year, with three core priorities:

  • Optimizing Operational Efficiency
  • Improving Resident Experience
  • Implementing Technology Solutions

 

There seems to be particular motivation to upgrade talent as a means of implementing these strategies among institutional investors that are interested in establishing/strengthening in-house capabilities or improving the performance of operating partners. [VP Asset Management | VP Operations | VP Asset Management]

The existing inventory of seniors housing is aging faster than new developments are being built. According to NIC, 45% of the overall seniors housing inventory is in communities that were built over 25 years ago.[ii]  Concerns about oversupply due to the development boom of 2016-2019 had already brought about a general slowdown in new product coming online, and that was only exacerbated by the Pandemic and the dramatic plunge in occupancy levels that followed (and this trend will only continue to increase in the near term). As existing buildings age, they face the loss of value due to general depreciation compounded by competition from more appealing housing options with improved amenities, better aesthetics, and higher care capabilities. In an effort to preserve asst value, many organizations are considering boosting their CapEx programs and putting a renewed focus on facilities rejuvenation/upkeep. [SVP - Real Estate & Facilities]

 

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