The Numbers Behind the Senior Housing Niche

An interesting  take on the establishment of the senior housing area as a profession specialty has been posted on National Real Estate Investor. 

The long article is based on the site’s new survey conducted with Senior Housing Global Advisors Inc., a Miami-based REIT it works with for periodic examinations of the field.

This is the fifth time the website and the REIT have conduced the survey, and second time this year.

Not surprisingly, the respondents say they see improvement in the market, and more and bigger business in senior housing’s future.

Specifically, a majority of respondents say they anticipate increased activity in the next six months reaching well into 2014 in three areas—investment sales, construction and financing. 

The report quotes Mel Gamzon, president of Miami-based Senior Housing Global Advisors, who says that there is "a lot of demand and a lot of capital in the market interested in buying seniors housing facilities, including both high-quality assets and value-add opportunities." He adds, “The supply of acquisitions remains tight, and the pricing for those high-quality assets is still aggressive and will continue to be aggressive into 2014,” says Gamzon.

The study was conducted between Sept. 25 and Oct. 31. NREI subscribers were emailed requests to participate in an online survey. That resulted in 187 completed surveys, with 131 respondents involved in seniors housing as brokers, developers, owners or operators.

The survey said that 79% predict that new construction will increase in the next six months. Two-thirds of respondents said they have new construction ventures planned in the next six months, "with the largest share of respondents (44 percent) planning construction in independent/assisted living and 32 percent planning new memory care facilities," the report says.

The survey looked at sources of capital.  It found that investors are accessing multiple sources.  It said that 53% are considering local/regional banks acquisitions and new construction. Another 34% are looking to U.S. Department of Housing and Urban Development loans, institutional lenders (34%), national banks (33%), life insurance companies (26%) and Fannie Mae and Freddie Mac (23%).

The report says that $9.2 billion in seniors housing properties had traded hands during the past 12 months—up 27% compared to the same period a year ago, according to data from New York’s Real Capital Analytics, which doesn’t include nursing care facilities’ sales.

The greatest growth in investor demand will be in independent living/assisted living and memory care, driven by "a steady demand from the existing seniors population and the aging baby boomers waiting in the wings."

The report has several examples of business spending plans, it can be found on the National Real Estate Investor here.

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