Archive for the ‘Senior Living’ Category

Demographic Trends Lead Investor Interest to Alternative Assets

Thursday, April 4th, 2013

Due to lack of confidence in the future performance of traditional commercial real estate property types, many investors are beginning to set aside capital for alternative assets. According to the National Real Estate Investor, such assets, including student housing, seniors housing and medical office buildings, among others, have broad demographic trends supporting their success, proved immune to the recession and offer higher yields than comparable properties in other sectors.

The current market demand for alternative assets is being driven by demographics. The 78 million baby boomers nearing retirement and 80 million echo boomers entering their college years are creating a significant need for more senior housing, medical office and student housing space. In addition to the high demand, many of these special purpose properties can be purchased at very attractive cap rates at the moment as they all seem to carry less liquidity due to their early stages of development and smaller pool of investors.

To read the full article from the National Real Estate Investor, click here.

Posted in Economy, Medical, Multi Family, Office, Real Property, Senior Living, Student Housing | No Comments »

Senior Housing Developers Using Caution

Tuesday, March 19th, 2013

Despite the overwhelming demand for senior housing space, development continues to lack, and is commonly blamed on tight financing. However, according to the National Real Estate Investor, the lack of bank support may be a myth, experts say, as established firms are more likely just building carefully and focusing on need-based uses rather than market-rate properties. As it stands, construction starts for senior housing represent 1.4% of inventory, one-third less than the level right before the recession.

As developers remain picky in an industry that is still riddled with mystery, it is becoming more and more evident that the senior living pipeline is one that will be built gradually, with the most needed housing being snapped up as soon as it is opened. Still, despite what is being reported, financing is not difficult to come by for senior housing development for those firms that have experience in the industry.

To read the full article from the National Real Estate Investor, click here.

Posted in Construction, Economy, Multi Family, Real Property, Senior Living | No Comments »

US Senior Housing Occupancy at a Four-Year High

Wednesday, October 17th, 2012

Senior Housing claimed an 88.8% occupancy rate over the third quarter, up 0.2% from the second quarter and 0.8% from the previous year. According to REBusinessOnline.com, occupancy is now at a four-year high and with inventory growth remaining tempered, there should continue to be occupancy gains in the near term. Occupancy rates have increased consistently over the past 10 quarters and now sit 1.8% higher than its cyclical low of 87% in the first quarter of 2010.

Rents are also hitting record highs increasing 2.2% over the third quarter. The pace of rent growth is at its highest since late 2009 and above core inflation for the first time since late 2010. The higher rents paired with the trend of construction activity remaining on the decline amid an environment of increased occupancy spells good news for senior housing facility owners.

To read the full article from REBusinessOnline.com, click here.

Posted in Economy, Multi Family, Real Property, Senior Living | No Comments »

Private Equity Funds May Splurge on Senior Living

Tuesday, January 31st, 2012

Private equity firms are in a prime position to become the next big investors in the senior living segment of multi-family. According to the National Real Estate Investor, private equity groups are looking for places to put their money to work amid poor economic conditions and a rather lackluster commercial real estate market. Investors are drawn to the market due to the sheer volume of seniors who might need special housing, in addition to current occupancies rising and the lack of new construction under way.

The main concern to an all-in approach for private equity investors on the senior living market is the fact that many of the large portfolios have recently been traded. With a shortage of these deals on the table, investors will look towards individual assets to assemble a portfolio. Many believe the best bet is to look at underserved markets, underperforming properties and creative approaches like buying non-profit assets and converting them to for-profit entities.

To read the full article from the National Real Estate Investor, click here.

Posted in Financial Services, Multi Family, Real Property, Senior Living, Special Services | No Comments »

Prices Climb for Top Senior Housing Projects

Tuesday, November 1st, 2011

Senior housing is increasingly being viewed among investors as a safe real estate play, causing prices to rise and bidding to become competitive. According to the National Real Estate Investor, now is an excellent time for owners to monetize their investment as values of top projects today have increased compared to two years ago by no less than 20%. This is backed by prices for top senior housing properties fetching $170,141 per unit today compared to $101,000 per unit two years ago.

Among the factors driving investors to high-quality senior housing are the cash-richness of health care REITs, who have purchased $22 billion worth of senior housing real estate through June, and the fact that little new developments are being built due to lenders being cautious in making construction loans and investors worries about sinking money into new properties. The industry is also getting more attention from new investors like private equity funds, venture capital companies, pension funds and offshore investors.

To read the full article from the National Real Estate Investor, click here.

Posted in Health Care, Multi Family, Real Property, Senior Living | No Comments »

Health Care REITs Shift Strategy, Raise Risk

Wednesday, March 2nd, 2011

Health Care REIT owners are trending towards taking on increased risk by assuming a role in the operations of the medical facilities they own. According to The Wall Street Journal, the change in strategy, which has fueled many recent mergers and acquisitions among owners of medical offices and senior housing, is partly a result of the federal law passed in 2008 which made it easier for landlords of health care facilities to establish taxable subsidiaries to oversee the management of operations.

Prior to the passing of the law in 2008, Health Care REITs refrained from this risky behavior they had to be weary of not violating tax rules requiring they derive 75% of their gross income from rent as defined by the IRS. Back then the IRS didn’t consider revenue from medical buildings to be rent due to the short length of patient stays. The law has changed to help health care providers not incur the expense of maintaining real estate as they confronted rising health care costs. Companies are now taking advantage of the change, thus allowing them to manage properties more efficiently.

To read the full article from The Wall Street Journal, click here.

Posted in Health Care, Multi Family, Real Property, Senior Living | No Comments »

Benchmark Senior Living and Health Care REIT Form Partnership

Wednesday, February 16th, 2011

Benchmark Senior Living will add their 34 senior housing communities to Health Care REIT’s portfolio, combining to form an $890 million partnership between the two companies. Health Care REIT will have 95% partnership interest to Benchmark’s 5%. According to GlobeSt.com, the partnership will continue to enhance Health Care REIT’s growth potential as Benchmark has been able to produce exceptional NOI growth despite a rough economic client.

With the partnership, Health Care REIT will have the right to fund future investments by Benchmark. This gives Benchmark a strong capital partner and a stable foundation to grow by adding new properties and pursuing new initiatives like geographic expansion outside of New England. Their current portfolio consists of 14 facilities in Connecticut, 13 in Massachusetts, three in Rhode Island, two in New Hampshire and one in Vermont and Maine.

Posted in Eastern, Health Care, Multi Family, Real Property, Senior Living | No Comments »

Heaven for Multifamily in 2011, Closer to Earth in 2012

Monday, February 14th, 2011

Combining the shortage in the supply of rental apartments due to few projects being initiated in 2009 with the stabilizing economy, uncertainty in home prices and boosting demand, the multifamily sector will have a strong 2011. According to the National Real Estate Investor, despite slow economic growth in 2010, apartment vacancies fell to 6.6% by the end of the year after starting at a record high 8%. National rents grew by 2.3% over the same period, a huge rebound from the record 2.9% decline in 2009.

Supply growth will shrink significantly in 2011 which will lead to lower vacancies. Projections show only about 51,000 units coming on line in 79 major metro markets, or less than half the annual average over the last five years. If projects continue to be delayed, these numbers may shrink even further in 2012. Projections, however, have 170,000 units coming to completion in 2012. The expected inventory growth may not last as long if supply outpaces demand.

To read the full article from the National Real Estate Investor, click here.

Posted in Apartments, Multi Family, Real Property, Senior Living | No Comments »

Occupancy Gains Anticipated in Senior Housing Market

Thursday, January 20th, 2011

While the dire state of the housing market has caused occupancy rates at senior housing facilities to fall over the past year, 75% of senior housing managers or owners who responded to a National Real Estate Investor online survey claim that they expect the level of occupancy at their properties should increase over the next six months. Even better news is that one-third of the respondents indicate that transaction activity has already begun to increase, while 44% expect transaction levels to rise by the end of 2011.

Another highlight of the survey from the National Real Estate Investor is that rental discounts and incentives have had a negative effect on occupancy at senior housing facilities over the past year, according to 36% of respondents. However, 26% indicate that the discounts and incentives have had a positive impact on occupancy, while 34% say they’ve had no effect. Overall, the survey shows that the biggest current demand is coming from the independent living/assisted living segment of the industry.

To read the full article from the National Real Estate Investor, click here.

Posted in Multi Family, Real Property, Senior Living | No Comments »

Spinoff by Sun Healthcare Signals Upbeat Outlook for REITs

Tuesday, December 21st, 2010

Giant nursing home company Sun Healthcare Group is looking to capitalize on the robust REIT environment by splitting into two publicly traded businesses. The newly formed Sabra Health Care REIT acquired the real estate assets of Sun Healthcare equaling 86 properties in 19 states and totaling $1.9 billion. Sabra plans to diversify its portfolio by acquiring hospitals and medical office buildings, thus avoiding having a single tenant concentration.

According to the National Real Estate Investor, the split comes amid a wave of health care REIT activity in seniors housing. Flush with cash, REITs have been on an acquisition spree. Sabra believes there is an opening for them to partner with smaller operators looking for an exit strategy due to other REITs snatching up bigger operators. The outlook for Sabra is bright with an already existing nursing home portfolio performing well in line with national occupancy rates.

To read the full article from the National Real Estate Investor, click here.

Posted in Health Care, Leased, Multi Family, Office, Real Property, Senior Living | No Comments »

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