For instance, Aegis has formed a “virus council” made up of physicians, virus trackers, psychologists, immunologists and gerontologists, and also hired an in-house researcher — all with the specific goal of informing the Bellevue, Washington-based company’s infection control strategy, according to CEO Dwayne Clark. Having that much expertise on hand is important when dealing with Covid-19, which Clark compared to a “three-headed monster” consisting of a trio of challenges: the virus itself, the economic effects of the virus and bad press.
“Unless you have a strategy for all three, you’re going to be in a world of hurt,” Clark said during a Marcus and Millichap senior housing outlook webinar Friday.
And he issued a word of advice for other senior living operators: get used to the new normal.
“If you think you’re going to go back and operate the way you did three months ago, you’re operating in an illusion,” he said.
Still, all three companies see opportunities to get ahead in the new post-pandemic world, even as the landscape for development enters a paradigm shift and acquisition opportunities become more scarce.
As Covid-19 rampages through the country, it will no doubt continue to affect the fundamentals of the senior housing industry. Specifically, Clark believes that, with regard to new construction, financing will be an issue. He compares the current period to the Great Recession, when loans tightened up at the outset before banks gradually inched back into the lending waters.
“If you don’t have a good balance sheet, if you don’t have a good history of being a good operator, I think it’s going to be next to impossible the next 24 months to get a loan,” Clark said.
Already, financing in general has tightened up and spreads from lenders have risen, curtailing the market, according to John Chang, senior vice president of research services with Marcus and Millichap.