By 2040 the US population over 65 is expected to increase by over 68% to 82 million people, while the over 75 demographic adding 22% over the next five years.
As our population gets older and lives longer, these demographic tailwinds are converging with a senior housing infrastructure where almost 50% of the assets are over 20 years old and in need of replacement or significant upgrades. This population growth, coupled with new construction well below a normalized average of 4%, has created an imbalance of supply and demand.
Senior housing operators are responding by adding new capacity. This creates opportunities for hPACE financing to provide capital for eligible investments in senior housing communities. In addition, hPACE eligible improvements, often representing as much as 20% -30% of total project costs, can improve the health and wellness of employees, residents and their families and help create safer, more eco-friendly environments that attract new residents and increase occupancy rates. In addition, financial returns for owners and developers can be improved,and balance sheets strengthened, as hPACE reduces the reliance on senior leverage and supplements equity investments at rates and structures more favorable than mezzanine capital.