According to recent statistical and anecdotal information, senior housing assets continue to attract a wide range of investors. Industry participants and others who are interested in furthering their investments in seniors housing before interest rates rise markedly should contact the successful firm Cambridge Realty Capital to learn more about the many different financing options it offers.
Today’s senior housing investment landscape includes a number of different participants ranging from pension funds, institutional investors, financial firms, and senior living providers; to private investors, private equity groups, asset management groups, and real estate investment trusts. One of the reasons so many different groups are investing in this space is the increased demand that’s being generated by the country’s growing elderly population. For example, depending on the age group, in 1998 the percentage of senior citizens that were living in age-qualified housing was between 4% and 11%. However, today this range has expanded and is now thought to be between 6% and 19%. Some of the other factors driving investor interest in the sector include higher capitalization rates relative to other real estate investments, low volatility, greater returns, and strong performances by senior living communities across the board, including increased occupancy rates. Growing interest in senior housing assets is supported by comments from a number of different industry professionals. For example, Imran Javaid, the managing director of healthcare real estate for Capital One Bank has stated that “Multifamily developers are looking to get into the senior housing space as they think it’s more attractive on a yield basis. We’re currently seeing a lot of interest from a lot of different parties.” Mr. Javaid’s comments are supported by statements made by Albert Rabil III, the managing partner at Kayne Anderson Real Estate Investors (KAREA).
KAREA is the real estate division of the management firm Kayne Anderson Capital Advisor and has aggressively moved to increase the size of its senior housing portfolio in the past year. Last year it acquired six senior housing assets in Florida and earlier this year it acquired over 1,000 independent senior living units in Texas. KAREA is now the 41st largest owner of senior housing assets in the nation and is pursuing a strategy of growth through acquisitions and development that it anticipates will lead to a senior housing portfolio that has at least 3,600 units by the end of the year. Mr. Rabil has addressed KAREA’s moves in this area with his statement that, “We’ve been looking for the right opportunity and right set of circumstances to enter both the senior housing and medical office spaces for an extensive period of time, and last year we found opportunities in both sectors.”
Even with increased investor activity in seniors housing, there are still more than enough deals in play to keep all of the industry’s participants busy. Indeed, Mr. Javaid commented on this when he noted that “There’s room for banks, large and small REITS, and for Fannie, Freddie and HUD to play some role. The market is large enough, and robust enough, that everyone has a role to play.” As the industry continues to grow and additional investment opportunities become available, senior housing participants and others who are interested in investing in the sector through an acquisition or other method should continue to look to the successful financing firm Cambridge Realty Capital for their capital needs.
