Investment

CHICAGO — Welltower CEO Shankh Mitra believes it could be a few years before seniors housing development will once again be feasible for the giant healthcare REIT to undertake because of strong headwinds facing the industry, including the “out-of-control” cost of construction. Construction costs have increased 50 percent or more over the past five years, according to Mitra. “I don’t see how that [cost] comes down meaningfully unless we solve the labor situation.”  There were 363,000 job openings in the construction industry at the end of July, up 10,000 from …

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Seniors Housing Construction Trends

By Berkadia Seniors Housing & Healthcare Like many sectors within the commercial real estate (CRE) industry, the seniors housing market faced headwinds over the past year, largely due to tightening financing conditions and widespread economic uncertainty. However, based upon research and anecdotal evidence from the clients and companies we serve in the seniors housing space, we believe the sector is well positioned to bounce back and generate positive operating results for the remainder of 2023 and into 2024. View a higher resolution version of the construction trends graph above here. Fundamentals …

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By Jeff Shaw By many metrics, it has been a slow couple of years for REITs immersed in the seniors housing segment.  The volume of acquisitions and dispositions by REITs in 2022 was the lowest in at least a decade, according to MSCI Real Assets. The expectation is that 2023 is going to be another down year for transaction volume.  Publicly traded investors made approximately $2.5 million in acquisitions and dispositions in 2022, dropping from $12.7 billion in 2021. As recently as 2015 that number was over $15 billion. But …

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Dog Days Senior Living Investment Market Panel

The Sept. 14 webinar “It’s the Dog Days of the Senior Living Investment Market — How to Find the Creativity Needed to Overcome Capital Markets Crunch“ analyzed the outlook throughout today’s seniors housing market. Operations recovery, development, transaction trends, capital availability and pricing were all points of discussion for an hour-long conversation between a six-person panel of industry experts. Where are there opportunities and how is the seniors housing world adapting to the current environment? Register here to find out more about what experts are seeing in the capital markets landscape. Major …

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BASALT, Colo. — Realty Capital Partners, a Dallas-based equity investor, has invested $11.7 million in the development of 72 residential rental units tailored for active adults in Basalt. Developer Realty Capital Residential has acquired the land and secured all necessary entitlements, permits and approved plans. The project will encompass a modern living concept and 2,600 square feet of ground-floor restaurant space. Groundbreaking is set for this month, with completion slated for August 2025. The community will feature one- and two-bedroom floor plans ranging from 675 square feet to 1,322 square …

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DALLAS — The Seniors Housing & Care Investor Survey, conducted each year by Dallas-based CBRE Research, shows that capitalization rates are on the rise, and many expect that trend to continue. The survey focuses on rapidly changing market conditions due to inflation, staffing shortages and rising interest rates. CBRE’s methodology and pool of respondents was not disclosed with the survey results. The average seniors housing capitalization rate increased by 26 basis points year over year, and survey respondents view assets with the lowest cap rates as those most negatively impacted …

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CBRE seniors housing valuations

The June 29 webinar “Seniors Housing Success Stories — Companies that are Rising Above the Headwinds“ focused on what leading seniors housing firms are doing to alter their businesses, streamline operations, increase occupancy and strategize in terms of deal volume and investment. Industry difficulties, including labor shortages, inflation and interest rates, have highlighted the need for expertise and well-informed approaches to the seniors housing sector recovery. Join panelists for an hour-long discussion that considers both operations and trends in transaction activity. See how strategies and outlooks have shifted since last year, …

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SAN CLEMENTE, Calif. — CareTrust REIT Inc. (NYSE: CTRE), a San Clemente-based REIT, has closed two separate transactions on the West Coast with an aggregate initial investment amount of approximately $45.2 million. The investments include the acquisition of a skilled nursing facility as well as the funding of a mortgage loan secured by a California skilled nursing, assisted living and independent living campus. CareTrust acquired the 99-bed skilled nursing facility on the West Coast with an initial investment amount, inclusive of transaction costs, of approximately $19.2 million. The acquisition completes …

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Lument Laca Wong-Hammond ESOP quote

  Owners and operators considering an exit strategy today face a challenging economic environment. Higher interest rates have slammed capital markets. Valuations are in flux. Transactions have slowed. And the pool of potential buyers has dwindled. As an alternative to an outright sale to a third-party, an often-overlooked option is an exit to an employee stock ownership plan (ESOP). These plans allow business owners to sell all or part of the company’s stock to employees, allowing owners to diversify wealth away from the business while limiting their future liability. Ultimately, …

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CYPRESS, Texas — Granite Harbor Advisors, an investment advisory firm based in Houston, has hit its funding goal for its private equity offering to finance an expansion project at Spring Cypress Senior Living located in Cypress, a suburb of Houston. Spring Cypress Senior Living is an independent living, assisted living and memory care living facility. The center’s expansion project will bring 43 new independent living units split between townhomes and cottages, 95 new assisted living apartments, and 14 new memory care units. The project’s first phase is completed and has …

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