I have written twice before on this blog about the opportunity to convert small college campuses in senior housing communities. The first time was February 2, 2019 in response to an opinion piece in the Wall Street Journal about the challenges facing small, private colleges and how many of these would need to close or radically change their operations to survive. I reissued my original post with some updated commentary in September 2019 after Welltower REIT announced it acquisition of a college campus in the Boston area for conversion to a seniors housing community.
Today’s Wall Street Journal has an article entitled “Coronavirus Pushes Colleges to the Breaking Point, Forcing ‘Hard Choices’ about Education. The Journal article leads with the announced closing of MacMurray College in central Illinois after 174 years. The article goes on to indicate 50% of college enrollment managers are very worried about meeting fall targets for enrollment and tuition.
Before the pandemic, Robert Zemsky, a professor at the University of Pennsylvania graduate school of education in his book The College Stress Test indicated that 100 of the nation’s 1,000 private, liberal arts colleges were likely to close over the next five years. He now says 200 of these colleges could close in the next year, according to the Journal. Potential cancellation of on-campus classes this fall, growing impediments to overseas students and the increased appeal of lower cost, closer to home college alternatives all contribute to the growing financial distress of American colleges.
While the seniors housing and care is facing some challenges of its own, including: lower occupancy, some overbuilding, restricted admissions to due Coronavirus self-isolation and high levels of infection and death at some skilled nursing facilities, the number of seniors 75+, when many begin considering seniors housing and care options, is expect to grow about 40% between 2020 and 2030.
Strong population growth in the 75+ senior population, together with the fact that many seniors are looking for more dynamic living environments that include life-long learning, make us optimistic about redeveloping exiting college campuses in whole or in part to seniors housing.
Earlier in my career, before I began to focus on seniors housing and care and health care real estate as a stock analyst and investment banker, I spent more than five years as a real estate market and feasibility consultant doing a lot of work for colleges and universities including: University of Maryland at its flagship College Park campus, its Baltimore professional schools and UMBC in Baltimore County, Johns Hopkins, and Penn State Hershey Medical Center.
Please contact me at email@example.com if you wish to discuss specific college to senior housing projects.