David Ammons
David Ammons is president of Retirement Living Associates, Inc. (RLA), a company which provides planning, development, marketing, and management services for new and existing retirement communities. He has worked in and with Senior Living Communities since his graduation from Wake Forest University in 1985. Contact David Ammons at [email protected] or 919-783-0044 ext 21.
The Retirement Industry continues to evolve and expand as it responds to the arrival of the Baby Boom Generation. The mass and impact of the Baby Boomers has long been discussed, watched and reviewed. Our industry has prepared and planned for this impactful group for years. Many point out that the impact is complex and will be felt based on transition of wealth, the number of babies born between 1946 and 1964, and the tendency for this group to speak up, speak out, and make clear their desires, intentions, and interest.
On the heels of COVID from approximately 2020 to 2022 and then inflation in 2023 and 2024 to the recent 2023 to 2025 trend for lenders to be hesitant to finance new communities, our industry is considered by many to be “behind” in new developments. This can be seen in the strength of the current high number of communities being bought and sold across the country. Investors, owners, and operators are aware that new construction is expensive today – to the point that purchasing and refurbishing or modernizing older communities makes more business sense. I worry that while “Yes” this makes business sense, we are talking about appealing to a group that has seen many markets and products adjust and accommodate their tastes and preferences.
Depending on the type of community seniors most interested in a particular community will vary in age. From those communities focused on ages 55+, independent living focused generally on upper 60’s to mid 70’s, and others that attract folks from the mid 70’s into the low 80’s. With the most aged baby boomer now hitting 79 and 80 the demand is upon us and the supply is behind and not yet catching up due to many factors including challenges for financing.
I believe the first third of 2025 has shown a major move back towards finance options. These options are becoming more and more creative with some communities combining various types, such as traditional bank loans with taxable and tax exempt bonds. A somewhat new option is C-PACE, and it seems to be growing as states accept and welcome this type of debt tied to property tax.
With respect to Recognition the trend for communities to be able to obtain a debt rating is growing. Rated debt can help push down rates, total costs of financing, and long term impact on budgets. All of these help in making new construction more affordable.
A bottom line question from all of this is, what is the impact on consumers? New options and new communities are needed because of the size of the demand, but refurbished and modernized communities can be very well done and make excellent choices. I have shared before in my column my strong advice to “just make a plan.” The famous quote “if you fail to prepare then you are preparing to fail” may be a bit strong, but having a plan, getting on a waiting list, and visiting communities in areas of the city or country that interest you will put you on the path to success.