Seniors Housing Business

AUG-SEP 2015

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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30 www.seniorshousingbusiness.com Seniors Housing Business n August-September 2015 REITs repeat as most active buyer type The biggest buyers in the U.S. seniors housing arena continue to be the REITs and publicly listed companies, which accounted for $8.9 billion in acquisitions, or 61 percent of all transaction activity, year to date through August. During the same period, private buyers spent $3.8 billion on acquisitions, representing 26 percent of all deal volume. The trend unfolding this year is similar to recent years, but with REITs and publicly traded companies showing even more dominance on the acquisitions front. Investment sales activity picks up the pace Seniors housing property and portfolio sales in the U.S. totaled $14.5 billion from January through August of this year, up 32 percent from same period in 2014. A low interest rate environment plus an increase in capital availability has created an optimal situation for aggressive buyers such as REITs, say industry experts. Have cap rates reached an infection point? The average cap rate has risen more than 50 basis points this year to reach 7.95 percent at the end of the second quarter. The uptick follows a period from 2012 to 2014 that saw cap rates fall gradually. Industry experts aren't certain if cap rates have reached an infection point, or if the upward trend recorded in the frst half of the year is only a blip. Data trends Source: Real Capital Analytics is the source of this data, which is based on U.S. property and portfolio sales $2.5 million and above n Institutional n Cross-border n REITs / Publicly listed companies n Private n User / other Average cap rate 10% 9% 8% 7% Q1 2012 Q1 2013 Q1 2014 Q1 2015 Unted States Cumulative monthly volume in $billions $20 18 16 14 12 10 8 6 4 2 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 5% 8% 44% 42% 1% 2013 9% 6% 47% 36% 1% 2014 10% 2% 55% 32% 1% 2015 YTD through August 11% 0% 61% 26% 2% n 2015 YTD through August n 2014 n 2013 n 2012

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