- On January 26, 2018
At the end of 2017, Fitch Ratings provided a positive outlook for nonprofit continuing care retirement communities (CCRCs) due to three years of increased capital spending for renovations and expansions; healthy occupancy at 92.3% led by independent living; operating profitability; and favorable real estate markets. The most uncertain element to affect 2018 at the time Fitch’s report was released—potential elimination of tax-free Private Activity Bonds (PABs) originally proposed under the Republican tax reform bill—didn’t come to pass. The final bill spared PABs and paves the way for nonprofits to see continued positive growth in 2018, although the elimination of advanced refunding will be a source of concern.
With this potential for positive 2018 growth, it is even more imperative that nonprofit CCRCs ensure their business plans reflect operational and sales strategies that capitalize on the current market. Senior housing is a cyclical market, so nonprofits need to ride the way to the top to mitigate risks at the bottom by finding the right partner who can provide:
- Data that is accurate and timely to make decisions on markets served and markets being viewed for entry/exit.
- Strategies—both short- and long-term planning—that are sound and built on evidence-based best practices while providing innovation.
- Management that is experienced at growth and optimizing operations for occupancy and revenue.
Authored by: Cindy Olson, Vice President, Consulting Business Development, Health Dimensions Group