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Now more than ever, businesses are seeking new and more efficient ways to operate. Changes in the Columbus senior housing industry over the last several years have forced out marginal operators and resulted in the recapitalization of millions of dollars in real estate. The dramatic growth of the industry during the late 1970s was spurred in part by multifamily developers who were unable to thrive when faced with interest rates of 20 percent plus prime and needed to add services to make their projects viable. Multifamily developments were made more attractive through the introduction of services that allowed a marginal increase in the average net income per unit (capitalizing on an economy of scale in overhead) to meet the lenders’ cash flow requirements. Original assumptions about the size of the market and fill-up rate were grossly overstated, and this error has made lending institutions more cautious. After many projects failed, lenders became reluctant to underwrite new projects until their portfolios of existing projects met certain performance thresholds. Some opted out of the business entirely. Lenders remain uncertain about whether to underwrite the industry as real estate or as a business. It seems that new development is viewed more as real estate, whereas acquisitions arc valued on the basis of operating cash flow and revenue multipliers. Even now, as providers are demonstrating a more positive track record, lenders are still choosy about the projects they underwrite. They are more attracted to projects that provide a continuum of care than to rental housing. Seniors are themselves becoming more informed about housing and care options and tend to prefer projects that allow them the greatest flexibility and choice throughout their lives. Even though the congregate projects of the 1980s are mostly full, rising interest rates remain a concern, complicated by the recent tendencies of the Federal Reserve to control inflation in the expanding economy. Current operators of congregate communities will attempt to offset the effects of rising interest rates during the next upward cycle by adding yet another level of service to their communities. This time, it will probably take the form of home health care or other support services for residents, designed to increase the average net revenue per unit. Such options will be popular among the residents, who will view them as cost-effective alternatives to admission to a nursing home. In addition, many residents may qualify for intermittent home health-care benefits through Medicare Parts A and B. The retrenchment of the 1990s meant that many small or marginal companies were bought out by larger players, and only the strongest survived. The product concepts, service capabilities, delivery packages, and market planning and sales abilities of the surviving participants have been tested and refined. Prospects for solid growth in the columbus senior housing industry remain bright, especially in assisted living. The rest of this chapter offers an analysis of growth within the industry and the potential effects of regulatory issues, the economic concerns of the seniors whom the industry- serves, the implications. There is a great growth in the number of senior housing facilities. Reading the reviews provided by the author is one of the best ways to gain necessary information on columbus assisted living facilities.
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