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Active AdultFrom The MagazineInvestment

Why So Many Investors Are Chasing Active Adult

by Jeff Shaw

Favorable demographic trends and the sector’s strong performance during the pandemic have helped attract capital, says InterFace panel. By Matt Valley Aron Will refers to active adult as the “chameleon asset class” because it exhibits characteristics of both the multifamily and seniors housing sectors. “Quite frankly, there are more characteristics of seniors housing than people give it credit for,” said the vice chairman and co-head of National Senior Housing for CBRE. But from an investment sales standpoint, many buyers and sellers view the sector through a prism that is either …

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Affordable HousingDevelopmentFrom The Magazine

Not Your Grandpa’s Affordable Housing

by Jeff Shaw

Newer senior living developments feature environmental sustainability, amenities and services far beyond the residences of the past. By Jeff Shaw The development strategy for affordable seniors housing of the past seemed to have one overarching goal: Don’t spend too much. Generally, the apartments were simply typical affordable housing units with age restrictions for residents, built as cheaply as possible to counteract the lower rents. That’s not the case anymore. Affordable seniors housing today features a host of amenities and services on site, and a strong focus on environmental sustainability.  “Prior …

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From The MagazineInvestment

REITs Take Differing Paths

by Jeff Shaw

Strategies of the industry’s biggest publicly traded owners range from billion-dollar purchases to exiting seniors housing altogether. By Jeff Shaw Publicly traded seniors housing REITs have experienced a roller coaster ride over the past 18 months. Stock prices soared in early 2020, then crashed in March 2020 as the pandemic began. Occupancy rates hit record lows and are just now showing signs of recovery. It has been a volatile period of highs and lows. As an example, Welltower (NYSE: WELL), the largest owner of seniors housing in the United States, …

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From The MagazineInvestment

Company Profile: CareTrust Finds Its ‘Secret Sauce’

by Jeff Shaw

With operational history in its front office, the publicly traded REIT is succeeding where others have feared to tread — skilled nursing. By Jeff Shaw The skilled nursing sector faces some unique headwinds. As the most healthcare-heavy form of seniors housing, nursing homes require intense specialization on the part of operators. The falling occupancy rates stemming from COVID-19 have put enormous strain on operator’s net operating income.  NIC data shows skilled nursing hit an all-time low of 70.7 percent in January, compared with 80.7 percent for independent living and assisted …

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CCRCFrom The Magazine

CCRCs Learn to Adapt, Thrive

by Jeff Shaw

Life plan communities outperform other types of seniors housing amid the pandemic due to an increased focus on choice and long-term residents. By Jeff Shaw The 2008 housing market crash, also known as the Great Recession or Global Financial Crisis, hit one segment of seniors housing particularly hard: continuing care retirement communities (CCRCs). The CCRC, or life plan community, concept is a campus with a full continuum of care — from independent living through skilled nursing — where residents can continue to live at the community as their acuity increases. …

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DevelopmentFrom The Magazine

Interior Designers Seek Perfect Balance

by Jeff Shaw

Seniors housing specialists must consider physical and aesthetic needs of many parties, and design choices can even help with infection control. By Jeff Shaw Interior design for seniors housing is a tricky proposition. A room’s layout, lighting, colors and furniture must be both aesthetically pleasing and functional for a wide range of users. That list includes the residents, care staff and visiting family — all while still at a price and style that pleases the building’s owners. “There are a lot of cooks in this kitchen,” says Melissa Banko, principal …

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FinanceFrom The Magazine

HUD Lenders Feel Effects of COVID-19

by Jeff Shaw

Occupancy issues create underwriting headaches, slower approval process, but pipeline remains active. By Matt Valley The emerging consensus among lenders in HUD’s Section 232 mortgage insurance program for healthcare properties is that total deal volume in fiscal year (FY) 2021 will fall short of the nearly $4.4 billion in loan closings recorded the prior year. In fact, some lenders expect the total dollar amount of loans closed will decrease 10 to 20 percent on a year-over-year basis.   Despite low interest rates, lenders cite an extremely challenging operating environment for …

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FinanceFrom The Magazine

Fannie, Freddie Undeterred

by Jeff Shaw

Despite a pandemic-induced pullback in lending volume, the agencies remain committed for the long term to borrowers in need of debt financing. By Jeff Shaw Many parts of the seniors housing industry slowed as a result of the COVID-19 pandemic, including the lending market. Fannie Mae and Freddie Mac, the two giant government-sponsored enterprises (GSEs), experienced a significant pullback in deal volume in 2020, but remained two of the larger capital sources in the sector. “We are the predominant lender in the space,” says Steve Schmidt, national director of seniors …

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FinanceFrom The Magazine

Capital Stack Shifts

by Jeff Shaw

Seniors housing lending isn’t dormant, but lenders and borrowers alike rethink their strategies as the pandemic continues. By Jeff Shaw The COVID-19 pandemic has been a shock to the entire seniors housing industry at every level, and capital providers in the sector are no exception.  With occupancy at record lows, lenders and investors understandably have changed strategies to protect their investments. Occupancy continued its free-fall in first-quarter 2021, falling 870 basis points year-over-year to 78.8 percent for private-pay seniors housing, according to the National Investment Center for Seniors Housing & …

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DevelopmentFrom The Magazine

Company Profile: Alliance Residential Breaks New Ground

by Jeff Shaw

The largest developer of multifamily communities in the United States tries to bring fresh ideas to seniors housing. By Jeff Shaw While seniors housing carries more operational risk and complexity than other commercial real estate asset classes, the property sector is enticing investors because it offers comparatively higher capitalization rates, meaning a higher annual return on investment. In 2019 before the pandemic struck, the average cap rate for garden-style apartment communities was 5.6 percent compared with 6.4 percent for private-pay seniors housing, according to Real Capital Analytics. In 2019, Alliance …

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