Coming of Age: Retirement Communities in the US Industry Market Research Report from IBISWorld has Been Updated

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As the population ages and requires more care, trends of the past five years, the Retirement Communities industry will flourish. Improvements in the housing market will also support growth, since home equity can be used to pay costs associated with entry into retirement communities. Banks and private equity entities are beginning to view retirement homes and assisted living as a desirable sector again, and the major real estate investment trusts in senior housing are well-positioned to invest again. Many of the acquisitions expected during the coming years will likely remain with distressed properties, and high-end properties are unlikely to be sold. Finally, industry operators will adjust services and facilities to attract more knowledgeable and educated residents by incorporating more technology and adapting to new markets. For these reasons, industry research firm IBISWorld has updated a report on the Retirement Communities industry in its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Aging baby boomers and restrained construction of new facilities will drive demand

The Retirement Communities industry is anticipated to exhibit accelerated growth in the next two decades. An aging population and growing need for dementia care (for people with memory impairment) are stimulating much of the industry's growth. Retirement communities provide a number of services for seniors who suffer from chronic illnesses to assist them with activities of daily living. “Over the past five years, the number of assisted living facilities that provide dementia care has risen as a proportion of total facilities,” says IBISWorld industry analyst Anna Son. “On the other hand, companies that do not include these services have suffered by the changes in the housing market and economy.” While the industry exhibits some resistance to the recession, a poor housing market hampers individuals' ability to move into a community. As a result, the housing market's downturn over the past five years has mitigated industry revenue growth. During this period, IBISWorld estimates that industry revenue will average annual growth of 2.8% to $51.3 billion in the five years to 2012, including a projected 3.3% increase in 2012.

Retirement Communities industry profitability has been pressured slightly since 2007, mainly due to costs associated with regulation compliance. Although the recession restrained new construction, “the industry has benefited from a cutback in the supply of facilities,” Son says, “which increased occupancy levels in existing facilities. As a result, higher occupancy rates were able to buoy the industry's profit margins, offsetting the declines in demand from those affected by the recession.”

During the five years to 2017, an improving economic environment, an aging population, healthcare reform legislation and new service offerings will facilitate industry growth. In addition, technological advances and new architectural designs will play a crucial role in industry growth as demand for innovative amenities strengthens. As the housing market improves, more seniors will be able to sell their homes and pay resident fees. However, the unstable commercial construction market will keep the supply of retirement and assisted-living facilities low, despite expected increased finances for this market. As a result, mergers and acquisitions are expected to become more common, with the number of industry companies projected to decrease in the five years to 2017. Many of the acquisitions made during the coming years will likely remain with distressed properties, and high-end properties are unlikely to be sold. Major company Brookdale Senior Living Inc. is focused on taking advantage of the fragmented industry and plans to continue acquiring through selectively purchasing assets of existing operating companies of individual communities. For more information, visit IBISWorld’s Retirement Communities in the US industry report page.

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IBISWorld industry Report Key Topics

This industry includes companies that primarily provide residential and personal care services for the elderly and other individuals who are unable to fully care for themselves or who desire to live in a community facility. The industry excludes companies that predominantly provide inpatient nursing, skilled nursing or rehabilitative services.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.

Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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