“Multifamily commercial real estate is a property that has more than five units — units being homes or dwellings — and can be anywhere from five up to 1,000 units in some places,” Jung recently said on “The Business Innovators Radio Podcast.” “Senior living is an example, and it’s one of those industries that is still in the early stages. With the number of Baby Boomers that are going to be aging, the opportunity is tremendous.”
As reported in the 2019 edition of the Population Reference Bureau’s “Aging in the United States,” the number of Americans ages 65 and over is projected to nearly double from 52 million in 2018 to 95 million by 2060, meaning the 65-and-older age group will make up 23 percent of the total population. The aging of the Baby Boomers — those born between 1946 and 1964 — could mean a 50 percent increase in the number of Americans ages 65 and older requiring some sort of elder care, which presents a unique investment opportunity.
“With senior living, you have the real estate component, and then you have the service component. This is where senior living starts to differentiate itself from typical multifamily property investing. Legacy Bloom focuses on independent living, assisted living, and memory care components,” Jung said. “Those living in independent living still have some needs — maybe they just need help with laundry, errands, maybe they need a ride, whereas assisted living is somebody that needs more help with some of the daily tasks; for example, they might need help with making sure they take their medication, or they need help with meal preparation or taking a bath. Memory care patients have the same needs of those in assisted living, but they need more intense help with their daily tasks, so you have a component of skilled nursing that comes into play at that point.”
All levels of senior living provide an investment opportunity — and sometimes they’re all under the same roof. “You might have independent living, assisted living, and memory care facilities all on the same site,” Jung says. “That’s what’s called ‘aging in place,’ so you can have somebody move from one stage to another within the same facility, and they don’t have the stress of another major move each time.”
The aging of the Baby Boomers — and the continual increase in life expectancy, which is currently just under 80 years, according to the 2019 United Nations “Revisions of World Population Prospects” report — could mean more than 1.9 million Americans 65 and older require some sort of elder care. There will also be a steep rise in the number of Americans living with Alzheimer’s disease, which could total more than 13.8 million people by 2050, according to the advocacy, education and support community Alzheimers.net.
While investing in any multifamily property may sound like it’s only available to the richest of institutional investors, Jung is confident that an investment in senior living is an opportunity within reach of many.
“There are plenty of larger investors out there, and they can buy projects all day long,” Jung said. “But this is really an opportunity for the working professional, the small business owner, somebody who has a family, somebody’s who’s looking to build their retirement with passive income streams and looking for opportunities to get better returns on their money.”
Real estate, particularly one with an almost guaranteed growth potential, can also be a safer way to invest money in a volatile market. “Stocks are an investment class where you just don’t have control. When you go in as an investor into one of these multifamily projects, you can control the decisions that are going to directly affect the type of income you can potentially earn,” Jung said. “You have an investment into a physical asset — you can see it, you can touch it, it’s there. Even with COVID, which is unprecedented and really a worst-case scenario, having money in that type of physical asset protects you more than if it had been in stocks or in an IRA.”
Perhaps the strongest argument for investing in senior living facilities now is the old lesson about supply and demand — and demand is about to explode. “When we look at the Boomers, who are going to start turning 80 in the next six to seven years, and we look at the supply of inventory that’s out there for senior housing, we already know that there’s going to be a shortage,” Jung said. “And that’s why this is the time to get in.”
About Legacy Bloom Investments, LLC: Based out of Northern California, Legacy Bloom offers real estate opportunities to investors who are seeking to improve their returns on their investments or diversify their portfolio. CEO and Syndication Partner Sara Jung has counseled hundreds of individuals over the years on various aspects of real estate investing and how to use financing as a tool for building wealth. For more about Legacy Bloom Investments, LLC, visit their website at www.LegacyBloom.com.