Wednesday’s 4th Annual NIC Regional Symposium in San Diego opened with a luncheon keynote delivered by Thilo Best, chairman and CEO of Horizon Bay Retirement Living. The approximately 800 attendees—which may have set a record for the Regional Symposium—were treated to the timeline of Horizon Bay’s journey from a small group of 24 properties to a national powerhouse managing more than 90 communities with 16,000 seniors housing units. While Best’s success story may have proved inspiring for the room of economically weary investors and operators, perhaps most interesting was his personal forecast for the industry’s future.
The following is what Best considers to be part of the bright outlook for seniors housing:
1. Technology solutions will become increasingly important investments for operators as healthcare continues to progress.
2. Consolidations will occur as regional providers make acquisitions, which is an outlook looked upon favorably by lenders who are becoming more interested in a facility’s local market dominance.
3. Large, sophisticated investors will surface and the industry has “nowhere to go but up.”
4. Customers will come from a broader market where LTC facilities are no longer viewed negatively as “one of those places;” the flipside being these informed baby boomers are also more demanding consumers.
5. Tougher management agreement terms will exist but with better compensation.
6. More development than predicted will occur as seniors housing is an entrepreneurial business—with smart local entrepreneurs and builders who will team up to update or replace older properties.
7. New industry leaders will emerge as companies combine or grow.
8. International markets will become more intriguing.
9. Financial sophistication will spread among operators.
10. It’s still an industry in favor; compared to the other real estate markets, seniors housing is looking pretty good.
Though the optimist in Best was certainly on display, a witty attendee from the audience did rouse one bout of negativity before the keynote ended by asking what about the business keeps Best up at night with anxiety. Best said, rather morosely, that the industry may not have “the best people in the right places,” that as the industry does become more sophisticated, the positions will outgrow the people’s skill sets.