Recent polling data suggests what many professionals in the senior housing industry have suspected for quite some time – that the current class of senior citizens and individuals seeking senior living housing have a huge preference for housing that incorporates environmental sustainability or is eco-friendly. The increased demand for senior based housing is not only spurring significant capital investment and financing in the industry, but the increase in demand is also being fueled in part for seniors that are looking for environmental housing that utilizes solar energy, space efficiency, and other kinds of environmental technology.
As a recent article highlights, “Recent research shows that companies with higher sustainability scores actually outperform their peers, and REITs like Ventas are investing heavily to improve their sustainability profiles.” Ventas, a leader in senior housing development, is incorporating environmental sustainability modes of development, which is based primarily on “Sunrise Senior Living, including a $3.8 million investment to install high efficiency and energy equipment in 20 communities located in New York, Pennsylvania and New Jersey [and] from replacing the lighting, mechanical, electrical and plumbing systems, the efforts will reduce energy consumption and utility costs.”
According to the National Association of Real Estate Investments Trusts (NAREIT), an industry advocacy and information group that represents worldwide REITs, companies such as Ventas are “making investments in green projects because companies with higher GRESB scores tend to do better [and] recent research demonstrated that REITs with strong engagement on sustainability measures financially outperform their peers.” The nexus between senior housing and environmental sustainability will likely increase over the next few years, especially where seniors continue to demand eco-friendly living and housing arrangements.
As one analyst observes, “the REIT industry continues to demonstrate strong year-over-year growth in sustainability efforts.” Ventas’ investment in environmental and sustainability-based projects is significant. One report notes that investments made by Ventas in 2014 will reduce 52 million gallons of water consumption, 3.5 million pounds of waste, and 17 million kilowatt hours of electricity consumption per year across Ventas’ portfolio. From an environmental impact perspective, such investment has a long-term impact that many companies are hard-pressed to match and demonstrates the important role that developments and investors in senior housing will continue to make in this regard.
Senior Housing providers are at a pivotal moment in time. Cambridge Realty Capital is versed in a variety of investments in the senior housing market. Our experience and expertise make us a leader in the investment world.
