From The Magazine

The Silver Tsunami Finally Arrives

by Jeff Shaw August 10, 2023

With baby boomers now aging into seniors housing in staggering numbers, how does the industry best serve this new generation of prospective residents? By Jeff Shaw For decades now, developers have been building up for a massive demographic wave of baby boomers aging into seniors housing. We’ve all heard the numbers: 10,000 Americans will turn 80 every day starting in 2025. By 2030, all 73 million boomers will be of retirement age. The wave was nicknamed the silver tsunami. With the first baby boomers turning 78 next year, the generation …

August 10, 2023

A Complicated Alliance Emerges

by Jeff Shaw August 10, 2023

While some owners see opportunities in converting obsolete seniors housing into behavioral health facilities, others look for ways to improve those services within their communities. By Jeff Shaw Seniors housing and behavioral health real estate have a lot in common. Both house people with a largely needs-based offering. There are a wide range of products to serve a variety of needs, and residents are sometimes not there by choice. Both sectors also have favorable demographics and strong real estate fundamentals on their side with demand outpacing supply. Behavioral health real …

August 10, 2023

Assisted Living Finance From The Magazine

Investors Expect Assisted Living to Get Biggest Bump in Rental Rates Over Next Year, Says CBRE Survey

by Jeff Shaw August 10, 2023

By Matt Valley More than 75 percent of investors surveyed by CBRE expect rental rate increases of at least 3 percent over the next 12 months across all seniors housing asset classes except skilled nursing. The most bullish outlook is in the assisted living sector where 28.1 percent of survey respondents expect to underwrite rent growth above 7 percent, up from 15 percent in the 2022 survey. No decreases in rental rates are expected for any asset class. Meanwhile, difficulty in maintaining adequate staffing levels ranks as the greatest headwind …

August 10, 2023

Development From The Magazine Operations

The Art of Turning Around Troubled Properties

by Jeff Shaw June 28, 2023

Owners and operators test new strategies and scrutinize all expenses as the number of financially beleaguered assets multiplies. By Jane Adler Despite encouraging signs of a seniors housing turnaround, the challenging operating environment is creating an uptick of troubled properties in need of their own turnaround. The triple whammy of the pandemic, rising interest rates and higher expenses has hit the sector hard. Margins are squeezed and valuations are depressed. What’s more, the recent banking crisis and the growing prospects for a recession have added to financial pressures. “There’s a …

June 28, 2023

Affordable Housing Development From The Magazine

The Affordable Housing Gap

by Jeff Shaw June 28, 2023

With high inflation eating away at personal savings, the number of low-income seniors is growing and LIHTC development struggles to keep up. By Jeff Shaw Today’s high inflationary environment is tough on everyone, but persons of limited financial means are getting hit the hardest. Most affordable seniors housing properties are fully occupied with a long waiting list, signaling that there is a strong need for the product. But the myriad issues facing the commercial real estate industry — especially rising construction costs — have an outsized impact on affordable housing …

June 28, 2023

Company News Development From The Magazine

Cogir, Cadence Are Bigger, Better Together

by Jeff Shaw June 28, 2023

With its acquisition of Cadence Living, Cogir Senior Living is building a company with wide-ranging expertise. By Jeff Shaw In a time when large-scale, entity-level acquisitions have been nearly non-existent, Cogir Senior Living’s acquisition of Cadence Living in November stood out. Both companies have a focus on the West Coast, and the combined total number of units is approximately 8,000 across nine states, making the company the 21st largest operator in the United States. Cogir is the Sacramento-based subsidiary of Cogir Services LP, a Montreal-based real estate company operating over …

June 28, 2023

Finance From The Magazine

At Mid-Year, HUD Volume Takes Expected Dip

by Jeff Shaw June 28, 2023

High interest rates, rising expenses curb transactions, cast spotlight on bridge loans. By Matt Valley and Jeff Shaw To borrow a baseball phrase, the rallying cry among lenders in the HUD Lean Section 232 mortgage insurance program used to finance nursing homes and assisted living facilities is “Wait ’Til Next Year.” The combination of rising interest rates and volatility in the capital markets has led to a slump in deal volume, but lenders see this situation as a temporary setback. Transaction activity has actually been waning the past few years. …

June 28, 2023

Finance From The Magazine Investment

Private Investors Pour Capital Into Debt Funds

by Jeff Shaw April 24, 2023

Financing vehicle enables private equity firms to open another revenue line while offering borrowers an option when lenders are scarce. By Jeff Shaw The growing popularity of private equity-backed debt funds is a win-win for many of the players involved. Rather than use their capital to buy more properties, private equity investors can lend money as a lower-risk, fixed-income alternative to owning assets. Borrowers have another source of debt, especially at a time when lenders may be scarce. Just as banks, for example, were re-entering the seniors housing fray following …

April 24, 2023

Finance From The Magazine

Fannie, Freddie Stall After Restart

by Jeff Shaw April 24, 2023

While financing sources appeared to return to form in early 2022, volatility in the capital markets ultimately throttled down deal volume in the second half of the year. By Jeff Shaw At first glance, 2022 looks like a partial return to pre-pandemic form for Fannie Mae and Freddie Mac’s deal volume within the seniors housing sector. After major downturns in 2020 and 2021, Fannie Mae’s volume rose 26 percent from $800 million in 2021 to $1 billion in 2022. Freddie Mac’s volume rose 29 percent from $2.1 billion to $2.7 …

April 24, 2023

Finance From The Magazine

Capital Corner: Seniors Housing Industry Braces for ‘Rocky’ Road Next 12 to 18 Months

by Jeff Shaw April 24, 2023

By Matt Valley March is notoriously volatile weather-wise, but March 2023 will long be remembered as a particularly stormy month for the financial markets. The collapse of two banks over a 48-hour period early in the month hit like a bolt of lightning. Santa Clara, California-based Silicon Valley Bank, a lender to technology startups, failed following a bank run during which depositors and investors withdrew $42 billion on March 9 alone. On March 10, the bank was placed under the receivership of the Federal Deposit Insurance Corp. (FDIC). Two days …

April 24, 2023

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