ENCINO, CA – The Community Living Assistance Services and Supports (CLASS) Act, part of the federal government’s sweeping healthcare reform legislation, will have a significant impact on the seniors housing market, according to a new report issued by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm.
“New healthcare reform may cause some pricing instability for seniors housing facilities but assisted living facilities will likely experience the most long-term benefits from the legislation,” says Gary R. Lucas (top right photo), managing director and senior vice president of the firm’s National Seniors Housing Group (NSHG).
The CLASS portion of the healthcare reform bill will set up government-sponsored, long-term care insurance, which could revalue skilled nursing facilities nationwide, explains Lucas.
Consequently, premiums will fall short of benefits paid out after the five-year vesting period, leading to further stress on Medicaid and reduced payouts under the current system.
Since most of the value in skilled nursing facilities relates to the profitability of the business and not its physical site, any decrease in Medicaid payouts will lower the value of the business.
“This trend will wedge a divide between new, state-of-the-art facilities that cater to Medicare and private-pay users and older communities that depend on Medicaid supplements,” says Lucas. The new report ranks 31 major U.S. markets based on occupancies through the first quarter of 2010. Seniors housing assets in Minneapolis, Baltimore and San Jose, Calif., have the highest occupancy rates, while occupancy rates in Kansas City, Denver and Las Vegas are the lowest.
For a copy of the Seniors Housing Research Report from Marcus & Millichap, please visit http://www.marcusmillichap.com/.
Contact: Stacey Corso, Public Relations Manager, (925) 953-1716
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