The Senior Housing Boom Is Here. Can Supply Keep Up?

Ashley Kent (00:01): Hello, hello! I am Ashley Kent here with GrowthDx and Nicole Funari.

Ashley Kent (00:08): Who's the senior principal of capital strategies at NIC, otherwise known as the National Investment Center for Seniors Housing and Care. I'm really excited about this conversation today. It's just particularly interesting to me, given I got my start in healthcare in a healthcare startup that was specifically focused on helping seniors age in place and also spend a good portion of my career in the commercial real estate space as well. And so this is obviously incredibly topical.

Ashley Kent (00:36): It's been topical for a lot of years as we've been waiting for the baby boomer boom to finally hit us. And so really excited to have Nicole lend her perspective as we dive into this. So Nicole, thank you for being here today.

Nicole Funari (00:51): Thank you for having me. Me and my boss were so impressed by the questions you sent over. We're like, wow, this is gonna be a really interesting conversation. She really kind of delved into really interesting topics. We were both like, wow, these are excellent questions. So yeah.

Ashley Kent (01:06): Well, thank you. I so appreciate it. When you have an interesting topic and one that I'm particularly interested in, I go a little crazy. So excited to hear your background. And before we dive into those questions, would love for you to give the audience just a background on yourself as we dive into it.

Nicole Funari (01:26): Absolutely. So I, yeah, as you said, I'm Nicole. I'm a senior principal of capital strategies at NIC. I've been here five months now, so still new to NIC, not so new to the industry. I came over from Nareit, the Trade Association for real estate investment trusts, where I did a lot of work on senior housing and skilled nursing. And I am a trained academic economist, but I have been in industry my entire career.

Ashley Kent (01:53): Fantastic. Well, I know we've got a lot to cover today, hence all the amazing questions you've been prepped on. So let's dive right on into it. We've talked about the silver tsunami forever.

Nicole Funari (02:03): Mm-hmm.

Ashley Kent (02:03): It seems like. It seems like my entire career this has been a big topic and we've been just kind of waiting on when it will hit. But the oldest boomers, they're just now turning eighty. So does twenty twenty six actually feel like an inflection point for us, or have we really overhyped this demographic story, or are we still waiting for this to really hit?

Nicole Funari (02:26): We at NIC are not waiting. There is one thing specifically we were waiting on. So we give quarterly updates of our sister company, the NIC MAP, using their data, and I think July occupancy for the thirty-one primary markets was up to eighty-nine point nine. So our sort of mental inflection point is when that number crosses ninety percent. But across all ninety-nine markets it's at ninety-one percent. So we feel like we're there. You know, we've got occupancy over ninety percent. We're definitely seeing twenty twenty six as kind of a record year for that.

Ashley Kent (03:03): Interesting. So, I mean, we know the demand is coming and it's here.

Nicole Funari (03:07): It's here.

Ashley Kent (03:08): But we also know that we're underbuilding. So why aren't we building more to keep up with that demand?

Nicole Funari (03:13): Yeah, I mean, it's just, it's really frustrating, and we are trying to keep our finger to the pulse a little bit on people saying, no, there's some development here, where's some development there. Like, we're really trying to track down some of those stories. But yeah, generally we are underbuilding.

Nicole Funari (03:30): So absorption is much higher than inventory, construction starts are at record lows, you know, all the sort of bad news on that front. And it's just a cost issue. At this point, unless you're gonna do something super high-end like luxury, it doesn't pencil out. And I think there are kind of three big factors that play into that. Number one are, you know, just the construction costs, the tight labor market, and the high tariffs, as well as, you know, interest rates. The cost of capital has come up a lot, and so it's just really hard to run the numbers in favor of building.

Ashley Kent (04:09): Interesting. And, you know, something else that I know we'll dive into a little bit later in the conversation, but there's also the operating model problem of it as well. It's yes, we have to build the spaces, but then we have to operate the spaces within there as well. So the costs don't stop at just the building. We have to be able to operate within there. And so is that where you're also seeing the capital constraints as well?

Nicole Funari (04:29): Very much so. One of the reasons I was brought into NIC and a key focus of my role is to talk about capital for operations. We need money to build, we need money on the real estate side, which is where typically all the money has gone. But yeah, we need our operators to grow and modernize and utilize new technologies, and that takes capital. So very much both sides need to be funded for this to work.

Ashley Kent (04:52): It's incredibly interesting. And I know we'll get into that a little bit more. I guess with the, you know, we're hitting really that inflection point. You're saying ninety percent occupancy. I mentioned that the first startup that I worked for was a company called HoneyCo Homes, and it was built on the entire thesis that, you know, people want to age in place. And, you know, we were building a really neat tech platform that essentially was leveraging technology to be able to allow seniors to do that and string together services.

Ashley Kent (05:19): So that it was safer for longer. So I'm curious too, you know, when we are hitting this point of costs are out of control, having, you know, facilities can maybe not be something that is, you know, as attainable for anyone. How does the aging in place discussion come into place here as, you know, we're looking at alternatives, and then at what point is there also a tipping point that is just no longer viable for someone?

Nicole Funari (05:45): Yeah, I mean, there's a lot of threads to pull apart there. So I will start sort of generally and then kind of trickle down a little bit. So first of all, you know, I don't want there to be this sort of false dichotomy between aging at home and senior housing. It can be the same consumer even at different points in their life. And we don't have enough senior housing even if demand stays exactly how it is now at these levels now, right?

Nicole Funari (06:13): We're pro aging in place if that's the right decision for you. You know, we're not trying to force everyone into senior housing. Like, that's not NIC's mission. It's all about accessibility and choice, actually. We think aging in place and staying at home can be a great option. But on the other hand, one, age in place could also be age in place at your senior housing facility. Like, all those technologies and services can be provided if your place is your active adult apartment or your independent living unit. So there's more cross-pollination there than I think people realize. And then I think we also see what you're seeing. Like, we are definitely seeing that.

Nicole Funari (06:57): A trend towards seniors entering senior housing at an older age, yeah, more towards eighty, and with higher acuity needs. So the transition becomes when, you know, those activities of daily living where it just becomes more than, say, a home health care, full-time home health care nurse can really do. And I would say also, like, I think that, yeah, I mean, every one of us, I'm sure, has a person in their life who's like, I don't wanna go to a home. And you're like, it's not a home. Have you seen assisted living places? Happy hour starts at three. But I think that one of the demographic shifts that we've seen that I think is really gonna come into play is number one, gray divorce.

Nicole Funari (07:49): So forty percent of divorces are with people older than fifty. That's been a trend I don't hear talked a lot about, but that's gonna leave a lot of seniors living alone. And even with home-based care, like, that's pretty hard to do, number one. And number two, I think what draws people to senior housing is community, right? Is communal living.

Nicole Funari (08:11): And I think that there's just always gonna be people who are either too lonely at home or who just are craving that community or who need that level of care. So I think that while we, I totally support age in place, I think there's such a good case for senior housing in terms of the socialization. And I think that's, you know, the baby boomer generation were the people who bought the big houses in the suburbs and moved away, right? But the millennial generation was the generation who moved back to cities, right? And wanted walkable, close communities. And so some of that decision-making is what the resident wants, but the adult children are a lot of times factoring into that decision as well. So you're looking at a demographic of, at least on the adult children's side, who are very pro communal living. So I think there's a lot to unpack with that.

Ashley Kent (09:08): There, we could like unpack this whole conversation, I think, for quite some time. Like, okay, here is our topic that we will stay on the entire time.

Nicole Funari (09:12): Yeah, we talked for two hours. Yeah.

Ashley Kent (09:17): Well, and I think you bring up so many good points as you were unraveling, you know, all the many threads that are a part of this. And it's funny because even back to, you know, the company that I worked for, so it actually was started by the guys that started Invitation Homes.

Nicole Funari (09:32): Yeah.

Ashley Kent (09:33): And, you know, they started the whole single-family rental space and the boom within there. And so really the technology and the aging in place part was just a small part of it. Their broader vision was actually what they called a distributed retirement community. Talk about being, like, woo, new for twenty, you know, fifteen when we were diving into this. But it was facilitated by technology. But to that point, you know, you have people that are living alone at a certain age, and, you know, the loneliness does set in. And to your point, they've moved out to suburbs. Their families are living in cities. And so how do you create that sense of community while still allowing them to have the home that they want to stay in and they've been in for however many years? Where there's like, how do you get the perks of the assisted living facility while still staying in the home as well. Which, you know, then you get into the whole, there were all these different models with, like, was it the reverse mortgage where, you know, they were selling their homes and then renting them back. And, you know, there's all kinds of ways, but those weren't very beneficial to the seniors. So it's very interesting. And to your point, there is a tipping point to where, you know, I think a lot of people have in their head when you hear senior living, you go to that like, my gosh, my grandmother who was so sad sitting in, you know, a room and, like, it was looked at that way. But, I mean, my grandmother, she made the decision to go into senior living, and there's a lot of places too where they won't accept you unless you can walk in. And so, you know, she was very proactive in that way and she was lonely. And she was really looking forward to the activities, the socialization that she was gonna be able to get there, and then was also being proactive to know, like, well, I'm only getting older, and, you know, I'm living alone, and I, you know, want to make sure that I am okay. And so, you know, there's different stages of it. And I think understanding that and, you know, I think there's probably some overlap with aging in place and where technology can come in to help there. But I think at the end of the day, you can't fix being in your home alone and not having people at arm's length distance, no matter what technology is available. And let's be real, this is, I mean, my grandmother can't, you know, can barely call or text. So how are we gonna leverage technology that's gonna be connecting them within there to replace it, essentially.

Nicole Funari (11:42): Absolutely. And, you know, I think that it's so interesting. Like, I'm dealing, again this is very personal, I think, to probably most of us. You know, I'm seeing it happen in my own family of the stubbornness of wanting to stay home, sometimes when that's not so realistic, and, or, okay, fine, stay home, but can we please hire you a housekeeper?

Ashley Kent (12:05): Bare minimum.

Nicole Funari (12:08): But yeah, I mean, I just, I think that unfortunately some of it is just a perception problem and that when people tour and go see what assisted living communities have to offer or other senior housing, you know, active adult, like, is a whole new category. And I think that there's, you know, new models are being written all the time. And so I think that, you know, there will be ways, like you said, for new models for aging in place and staying at home, but I think that the senior housing industry is continuing to evolve its models to draw people in.

Ashley Kent (12:46): Costly as well. As well. I think that's such a good point because you think about the technology and, you know, solutions that are happening, you know, in the home place. But, like, yeah, I mean, these models are completely evolving to a whole new set of an aging population that has grown up with technology and has grown up with, you know, their needs and their, you know, is no longer cookie cutter anymore. But then that also goes back into our original conversation of operating costs. And, you know, to give the people what they want, it's a completely different model as you start to expand that and it gets a lot more costly as well.

Nicole Funari (13:18): Yeah, I mean, it's not cheap, but, like, as someone who has to pay that monthly bill, it's not cheap. But you do get, you know, a tremendous amount of, you know, staff involvement and resident involvement for the price tag. And I think there is a hope that technology will create efficiencies and bring down some of those operating costs for sure.

Nicole Funari (13:41): And, or, just enhance quality at the same price, right? And improve, you know, limit accidents and falls. There's so much technology in the senior space looking at things like that, you know, just keeping seniors safe. Wherever, again, whether they're at home or in a senior housing unit.

Ashley Kent (14:02): No, I'm gonna shift our conversation a little bit to kind of just where the capital is going. Because, you know, everyone does seem bullish on the senior housing market again. But we talked about it at the top of our conversation, you know, if all the money's chasing the existing properties because it's expensive to start net new, are we actually solving the problem right now?

Nicole Funari (14:21): No. We have five markets, I can't rattle them off the top of my head, where because of renovation we're actually losing inventory. One of the trends, again, in how it's evolving is bigger unit sizes. People want more space.

Ashley Kent (14:43): Hmm.

Nicole Funari (14:43): To give up their house. They're willing to downsize, but maybe not to just a bedroom. So that's one of the trends we're seeing. And then when you have aging inventory, stuff coming completely offline, and or unit loss because it's being converted to a bigger unit, then you've effectively lost inventory. So yeah, we're seeing inventory declines. It's a real issue.

Ashley Kent (15:05): Well, and it's an attractive market because the demographic and population and demand is there, but if we're losing out on the inventory and going the opposite direction, if nothing else, you know, who can we count on to expand access and opportunities?

Nicole Funari (15:24): So again, I'll be completely candid. We're trying to figure that out. We're putting some research effort into what's happening on, you know, digging deeper into what's happening to developments, you know, looking up things earlier in the process, you know, like permit and licensing, and trying to see, you know, where there are green shoots and what's happening. Because we do hear from our capital providers that there is some development happening. It's not that there's none. So NIC is, stay tuned, we want to do a better job of tracking that down. But I think that it's unfortunately, I think we're just stalled until either interest rates come down or construction costs come down. I just, the math isn't gonna math until something gets cheaper.

Ashley Kent (16:15): Yeah, doesn't really, I guess, matter who you are. I mean, even kind of using your previous background and if you're looking across, like, REITs, private real estate, family offices, institutional investors. I mean, out of the options available, well, do you think there's anyone that's best positioned to fund this next generation of senior housing? Or are we truly in a holding pattern until the economics change and really everyone's holding tight to their cash when it comes to new development?

Nicole Funari (16:43): People willing to build in a luxury space are breaking ground. That's happening. And, you know, the hope is that, you know, the new shiny then kind of reduces class for everybody else. So some of those buildings might become more affordable to the middle, you know, the so-called middle market. But I think that, you know, again, the real estate investment is just, it's a little bit tough right now, but there are operators that need investment to grow as well and to pick up communities. And so I think that there's real opportunity for the investment on the operations side. And I think in terms of who's best positioned to do that, you know, I think it depends.

Nicole Funari (17:28): But I think that what we're at least seeing is people who are already healthcare investing in things like home-based care services or in provider practices, it's not as big a stretch for them to come over to senior housing. And then on the other side, at heart it's a hospitality service, you know, with the sort of care component. We're also seeing that there could be people stepping over from that side from the investment. And I will say somebody once said something interesting to me about family offices in particular, saying a lot of them have, you know, charitable or foundation arms that are invested in senior housing or, you know, grants or, you know, helping build or doing things in that space. And they're like, so whatever knowledge transfer that comes over from the foundation to the family office investment side could be very helpful for them. Yeah, I hadn't thought of that. Someone brought that up. Yeah.

Ashley Kent (18:23): Interesting. Yeah. Yeah, there's other pockets. The problem is it's just not the deep enough ones with that, which kind of leads me to a bit of the question. So, I mean, you know, I'm curious from your perspective here, you know, would you consider senior housing fundamentally a real estate investment with an operating component or even an operating business that happens to own real estate? It's kind of this, like, chicken and egg a little bit. I'm curious how you think about it.

Nicole Funari (18:53): It's interesting. So it's a very chicken and egg. I would say we are somewhat moving from the real estate business with the operations overlay towards something a lot more in the middle, where we're seeing some of our larger operators who are, you know, operations only starting to purchase buildings. And we are seeing now that they operate, I want to be clear on that, from my old job, we're seeing the rise of senior housing operating portfolios at the REITs, where the REITs themselves are investing some into the operators. So I think we're actually converging to a middle where it had been so much more of a real estate play before.

Ashley Kent (19:37): Right, and kind of to what you were saying before, it's like you have your traditional real estate investor kind of groups, but you've got these more so operators that are investing in other just senior-related spaces and innovation spaces that, yeah, to that point, it's an operating model that is, you know, facilitated by a real estate transaction to house it. And I'm curious if from just your previous experience and working across various asset classes, you know, what maybe took you by surprise the most when you got into the senior real estate space and how this particular asset class works compared to others.

Nicole Funari (20:13): It's very different over here. So much more. I would have thought it would have been a really easy going from Nareit to NIC. I would have thought it would be so similar. And the work in a lot of ways is similar. The people are very different. I think the biggest difference, and it's genuine, people are in senior housing because they love seniors and they love senior housing. Like, my investors, the, you know, the capital people I work with, love going to visit their communities. And so it isn't a real, it's so much less a real estate play than a people play than you would think.

Ashley Kent (20:52): Mm.

Nicole Funari (20:53): Even for the ones invested in real estate. Like, it's, people are here because they believe in it.

Nicole Funari (21:00): I mean, they wanna make money for sure, but yeah. I think it's just more of a people focus than other real estate classes. Especially, like, data centers, right? You're renting to a machine.

Ashley Kent (21:14): Yes. It was so interesting. I worked with a group at one point and it wasn't senior housing, but it was actually, like, early childhood education facilities, which is so opposite end of the spectrum.

Nicole Funari (21:24): Mm-hmm.

Ashley Kent (21:25): And I'm okay, you're gonna, you'll probably relate to this a lot. It was one of those that was so mission-oriented and they wanted to expand access to quality care, you know, for children and, you know, similar, just on the child side. But they had the hardest time getting demand from their investor base. But I will tell you, if they were gonna, you know, pop open a Tractor Supply store in the middle of, you know, you know where, people would be fighting tooth and nail to get in on that opportunity. And, you know, it does come down to the dollars at the end of the day. And to your point, like, these are expensive to run. And the same thing goes with early childhood education. It's, you know, very similar, maybe not to the extreme. But I guess to that point, you know, have you also seen where, you know, people, you almost need to have that mission-oriented angle to this for you to really dive into it because there are a lot of missteps that can happen along the way, can become incredibly expensive. So you really just need to know what you're getting yourself into before.

Nicole Funari (22:25): To a certain extent, yeah. I mean, I certainly wouldn't recommend anybody invest any money in something they're not pretty familiar with. So yeah, I mean, there's just a level of complexity to senior housing with the housing component and the care component through most of it. Which is why, you know, we're seeing a lot of, like, multifamily people kind of put a toe in the water of active adult, right? That's not as big a stretch as to, say, independent living even. So you do have to know what you're doing. And again, I think, you know, we're at a time where things are changing very rapidly. And so if you're gonna come into the space, you're coming in because you think that there's something new or, you know, novel or improving to quality that you can bring to senior housing. And it's a very entrepreneurial spirit right now.

Ashley Kent (23:20): That's all very, very interesting. And I know we keep coming back to cost, cost, cost. And we know that, you know, these facilities, they cost a lot to run, they cost a lot to live in. And so, I mean, the part that you do struggle with because you have this balance of there's the want of those that are, you know, willing to, like, move forward and there's the need of that. And, you know, we're at a point where, you know, millions of people need senior housing. But that doesn't mean that necessarily millions can pay for senior housing. And so how do we address this divide and the gap in, you know, the demand and what people can actually afford?

Nicole Funari (24:02): Yeah. I mean, that's something NIC has done a lot of work on and I encourage people to check out some of our resources. It's a key strategic area for us, as we call sort of, call it the forgotten middle. A lot of people in the industry do. Where you make too much money to get subsidized housing but too little to afford senior housing. It's something we're really cognizant of and we are aware that we, you see small-scale solutions, independent living, active adult communities who are more, whose mission is on the affordability side and will, you know, are designed to take those residents. But I'll be honest, like, we need a new playbook. We don't have a large-scale solution for this issue yet.

Ashley Kent (24:54): Hmm. So would you say that's kind of the biggest opportunity right now, potentially, in senior housing is the middle market rather than this luxury private-pay market and seeing if you can crack, you know, that market?

Nicole Funari (25:05): If you could crack it, that would be huge. Yeah. For sure. That would be a very, very big opportunity. But again, I think that that's what's fun about the industry is that, you know, you have the, like, acuity scale, so where you wanna place yourself on that. You have things like memory care, very specialized, which I suspect will grow as well in terms of specialized care. I think any way you wanna crack this nut, again, any sort of entrepreneurship and novel ideas, like, I think there's just, the door's wide open for senior housing to really meet the needs.

Ashley Kent (25:42): Hmm. I'm curious then, what do you think is holding the market back then from creating a more scalable middle-market model right now? Has it been that just more of the attention has been on the upper end and then the lower end, and now this has been the forgotten middle, or it truly is difficult to scale?

Nicole Funari (26:04): I mean, I guess I would say, you know, like, we're not doing a great job of affordable housing if you're not a senior.

Ashley Kent (26:13): Sure.

Nicole Funari (26:14): So the sort of the same issues apply in the senior community. There's, you know, I won't bore you with every complexity of why affordable housing is so hard to build or provide. But, I mean, I think all the same, I don't actually think that's that big a difference in the reasons of why it's not there for senior housing. I think it's the same set of factors.

Ashley Kent (26:39): We have universal problems happening wherever it is. It's gonna continue happening at any end of the spectrum.

Nicole Funari (26:43): It's pretty systemic. I mean, and it's gonna take political will, it's gonna take economic opportunity. There's just so many different things that play into it. It's a big problem for everybody at all ages.

Ashley Kent (26:55): I know I had a fantastic guest on last week when we spent the whole time talking about policy change and just how this can completely dramatically impact anything that's happening in healthcare and swaying this. And so I'm curious from even just the government participation in this, where are you seeing and who are the key players right now that are maybe fighting on this behalf so that we can, you know, start to see some change for the market.

Nicole Funari (27:20): Yeah, I mean, so the industry has a fair handful of trade associations, which I won't name because I will forget one. But I, you know, like I said, I think that even in the broader coalition for affordable housing, a focus on seniors, you know, there are coalitions that work on that as well. So I think there's a lot of people who are interested in this fight, some senior housing focused and some just sort of generally.

Ashley Kent (27:41): I want to switch us. We've talked a lot about the building, the real estate, the infrastructure, all of that. I want to switch us to the operations side of this a bit more. I mean, just in general, you know, we talked about it historically. We've been really good at funding the building, but now we're seeing this reverse of, you know, the operators are getting in here. How good are we at financing everything that actually makes the building and operations work once it's up and running?

Nicole Funari (28:08): I mean, I think that, I think we're pretty good at it.

Nicole Funari (28:12): The industry is so diverse, right? There's, you know, there's some little mom and pop people, there's, you know, there's places where they are the owner operator and they own kind of one building, and you have, you know, your Brookdales and your Ensigns, which are publicly traded operating companies. So it's a little bit hard to generalize, I think.

Ashley Kent (28:30): Mm-hmm. No, I think that's a good safe answer.

Nicole Funari (28:34): Yeah, I mean, I'm not trying to dodge the question, but I'm just sort of like, that's a big industry. Like, there's a lot of different types, I think. And I think that, you know, we are trying to work with our sort of maybe mid-size, like regional, smaller operators and, like, help them grow to the next level. We have, like, this growth conference and there's different resources we're trying to bring to the table to help them get capital to grow.

Nicole Funari (29:02): At NIC. That's something that's key for us. But yeah, I mean, I think it's just, it's different needs at different scale.

Ashley Kent (29:10): I'm curious with that too, you know, as you guys are providing the resources and education, you know, to that kind of middle-market operator within there, what are you advising them when it comes to areas of investment and scalability? Is that, you know, in technology, recruiting, clinical infrastructure, sales? You know, these aren't really real estate problems. They're all operating problems and business problems. And so I'm curious how you guys are advising those operating and where they need to be focusing to have sustainable businesses that can support the demand that's out there.

Nicole Funari (29:44): So we're working on a lot of fronts. An upcoming conference session is going to be on, you know, the senior housing operating portfolios for REITs, like, how to be an operator that a REIT chooses. So, you know, instruction on that level. But I think, like, one of the, I think the biggest, one of the biggest things that we're sort of focusing on and helping these operators is a little bit of the, is the how to pitch, how to professionalize, how to get all your data in order so that an investor can come in and see why you, you know, why you are a good investment, like, what the return potential is for you. And, you know, they haven't had much experience in, you know, this finance arena, so we're really working hard to kind of provide the resources and the guidance that can say, okay, here's how you go pitch to capital.

Ashley Kent (30:40): I'm curious, you know, we all love to talk about innovation and we love to talk about, you know, new things, but at the end of the day, it comes down to streamlining operations, having a well-run business, having, you know, we know this is a super high-turnover market within there. And so it's kind of fixing the house first. And then, you know, looking into other ways to scale through technology and other, you know, areas. You know, so if we go into the technology side of things, have you seen anything that's really started to gain any traction within the senior space that has been supportive and helpful for whether it maybe be on the operator side, but even the residents themselves that they're starting to adopt that's improving quality of care or operations?

Nicole Funari (31:21): Yeah, one of the biggest things I highlight, and there are a few, but I think resident and family communication is one of the big areas of improvement, right? So my mom is in memory care, I have a little app and they send me pictures and they, you know, of her doing different activities, and they stay in constant communication with the, you know, the adult children. I think that's something that has improved, you know, quality in terms of, again, limiting maybe some accidents, but also has improved the adult children being able to communicate the care needs that they've seen back to staff and the staff to the adult children so that there's more of a community spirit to inside and outside of the facility to keep the residents happy. So that's one of the technologies I think that's been pretty widespread and is something that has really improved the resident experience, the, again, I can say, the adult children experience, and actually made care easier to provide at the senior housing facilities. So yeah.

Ashley Kent (32:23): I love that and, you know, the unspoken audience too is the senior adult children that are outside the walls, you know, and kind of, you know, trying to support from afar. And, you know, like we said, we have a lot of, you know, millennial generations. And so it's how are you building technology that's also for the generation that is helping take care of their parents, where they're at? And so you've got, you know, new expectations on the adult children's side of what they need and expect. But then I'm sure there's also, you know, just new consumer experiences that the baby boomer generation expects that the generation before them didn't, and this would be part of that gap that it's filling.

Nicole Funari (33:01): Yeah, I mean, I think that's one of the biggest areas of innovation, and it's technology, but it's just innovation, has been in, you know, resident services and resident programs and what kinds of things to offer residents. What activities do they like doing? And I think there's been an understanding that the community is the draw, the communal activities are the draw. So what type of programming should we be invested in? And again, as all this refurbishment and renewal has been going on, more focus on the communal areas of the facilities because that's the draw. So I think we've seen a lot of interesting things happen there. I know that on the active adult side, my colleague just did a podcast and series about, you know, some of the programming things they've been introducing and what, you know, what seems common across communities.

Ashley Kent (33:53): Hmm. I guess to that point too, we've got a lot of rebuilding within the spaces, but I'm curious from your perspective, if we were starting from scratch today, rather than inheriting the model that we've had for decades, would we build the same thing or would we think about it a little differently?

Nicole Funari (34:12): I think we'd think about it pretty differently. Yeah.

Ashley Kent (34:17): How so?

Nicole Funari (34:17): I think that integration with the community, we're so much more cognizant of that now than maybe we were in the past. Where the, you know, the idea was that, well, it's, you know, it's the community of the seniors. But I think that there's an understanding that we want a more sense of multi-generational, that the community, we want our communities to integrate across the broader neighborhood, right? So I think there's that piece of it. And again, I think that the community setup of more communal spaces, of more places for people to meet and mingle and do different things, I think is much more of a focus as people are building now than they had been in the past.

Ashley Kent (34:57): Yeah, I think people used to associate isolation with, you know, being within these communities and how do you completely flip the script and the narrative because that's not what people want. And it's a huge draw to the communities as well. So how do you play that up more?

Nicole Funari (35:12): Right. So, I mean, and even it's funny too, I, like, well, they would probably wouldn't put phone jacks in the room. But also, you know, I was told, you know, don't bring a TV. That, no, my mom, again, this is specialized to memory care, like, no, my mom is not meant to be in her room ever. She is meant to go there to sleep and spend the rest of the time out of her room interacting with people and doing all the community activities.

Ashley Kent (35:37): That is so interesting. Because I do, I have this vision of my grandmother and she would, she'd sit in her room and she would watch TV. She'd come out for, you know, meals and all of that, but she got really comfortable in her space. And it's different personalities, you know, all the things, but I would imagine...

Nicole Funari (35:51): And they were like, don't even, but they were like, don't even do it. Just don't. Just don't give her a TV that she can stay in a room and watch her own TV. I was like, okay.

Ashley Kent (35:59): Oh my God, like, you're gonna have us as older adults, you know, we're in there scrolling on our phones, they're gonna say no phones allowed. Like, I could...

Nicole Funari (36:07): I mean, honestly, like, so my neighbor and I have a joke because she unfortunately, her father had Parkinson's and had to go into assisted living, and she's like, you know, every person we know who's a senior is like, I wanna stay home. Don't put me in one of these places. And her and I see what they're like and we're like, the minute we turn fifty-five, it's gonna be let us in. I never wanna do laundry or cook a meal again.

Ashley Kent (36:29): Signing up. It'll be this whole new wave. Yeah. You guys are shaping this new wave that's gonna make this incredibly marketable, attractive, and, you know, it'll be great.

Nicole Funari (36:39): Yeah. I mean, really, not having to clean seems like a great life choice.

Ashley Kent (36:45): Well, I mean, we're the generation of outsourcing everything, right? And, you know, our grocery shopping, our, you know, all house care, all everything. We have more people that are working, and so that's what you become accustomed to versus the homemaking. And so we'll be a whole other generation that will be very interesting to start to receive once we hit that point.

Nicole Funari (37:05): Yeah, and I, like I said, I mean, we're the live, work, play, right? That was the big thing in multifamily. Live, work, play. Live, work, play. There's a, I think that that community integration is something that is just so key, that nobody thought of when they were building in the nineties.

Ashley Kent (37:20): Yeah, no, I love that. Well, to wrap us up, I've been asking everyone the same question. I've had some answers that have been very similar, some very different. And so I'm calling this the one fix. And so if you were to have a magic wand and you can fix one thing in healthcare tomorrow, no budget constraints, no regulatory constraints, no politics, what are you fixing?

Nicole Funari (37:46): Well, I'm only gonna give the most truly economist answer that I can give, which is to say, let's let me wave my magic wand and bring down interest rates. Cut inflation, low interest rates. Let's get the construction moving. Because that, you know, as we discussed, that is really the, just a key problem right now. So I'd like to see. And it would be, but, you know, prices lower for everybody and, like, I would fix a whole host of problems beyond healthcare.

Ashley Kent (38:14): Mm-hmm.

Ashley Kent (38:15): Yeah, you have an interesting market because it goes, yeah, it's healthcare and seeps into many other markets within there. And I think everyone would like interest rates to go down for all kinds of reasons. But, well, thank you so much for spending the last thirty-ish minutes with me. All of your insights have been incredibly interesting. And just a great other take on another end of, you know, just the demographics and markets that are out there. And said, yeah, just really appreciate your perspectives and for joining us today.

Nicole Funari (38:45): Well, thank you for having me. It was a fun conversation.

Ashley Kent (38:48): Perfect. Well, we'll chat later.