An improving economy and favorable demographics were expected to propel senior housing transactions this year and so far acquisitions in the space have taken place at a brisk rate. This has led to increased competition for senior housing assets as more buyers and investors enter the marketplace. Senior housing providers and other investors who are anxious to acquire additional senior housings assets of their own before competition picks up even further should continue to look to the Chicago-based financing firm Cambridge Realty Capital for assistance in financing these transactions.
A number of statements were made in recent earning calls that demonstrate the competitiveness of the senior housing market. For example, in response to a question on competitiveness during his company’s earnings call, Justin Hutchens, the President and Chief Executive Officer of the healthcare REIT, National Health Investors, responded by stating the following: “You mentioned the competitive environment. It is very competitive, which I always like to point out is a complement to our asset class because it’s a tremendous stability over the past several years and all indicators are it will continue to have stability over the – in the future as well. So, it’s attracted a lot of competition, both with private equity and debt combinations as well as the REITs and the non-listed REITs, but I think that also has created a lot more potential volume out there in the market as well. So, we’re still getting opportunities.”
Mr. Hutchens comments are especially important because they show that competition for senior housing assets is a positive development and not a negative one. Increased competition indicates that the space is stable and profitable. Moreover, it also creates additional opportunities because an increasing number of asset owners are likely to consider selling them in order to take advantage of the high level of demand that exists for them right now. This in turn increases the volume of assets that are available and makes the senior housing market even more dynamic and robust.
Mr. Hutchens’ view of the increased competitiveness in the senior housing space is echoed by Lauralee E. Martin, the Chief Executive Officer, President, and Director of the healthcare REIT, HCP Inc. In HCP’s earnings call Ms. Martin addressed competition and investments with her statement that “Well, there’s no question there’s a lot of money out there. I think that there’s been a great deal of activity, particularly in the sort of retail aggregator space, which we don’t play in, however, it is setting pricing expectations that are moving over into a more institutional market. What we’re doing is making sure that we’re going to the places that need capital.” Ms. Martin’s statement shows that additional buyers are increasing the robustness of the market by adding liquidity to it and that HCP’s strategy in this environment is to focus on the areas and sellers that need capital.
These are just some of the comments that were made by industry participants in recent earnings calls that reflect the increased competition for senior housing assets. The combination of their stability, favorable interest rates, and the increasing demand for senior housing services caused by the aging of the population continues to make them very attractive. Accordingly, industry participants and others who would like to grow their senior housing portfolios through an acquisition or other means should contact Cambridge Realty Capital to learn more about the many different financing programs it offers.
