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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38 Seniors Housing Business n August-September 2015 n Investment Flush with cash, private equity funds struggle to fnd high-yielding seniors housing investments. A good deal is hard to fnd By Bendix Anderson In July, a new seniors housing community opened in Paoli, Pa., about 25 miles northwest of Philadelphia. Just a month later, more than half of the 78 assisted living and memory care apartments at Daylesford Crossing were leased or committed to be leased. "The lease-up has been very strong," says Chris Kazantis, director for AEW Capital Management, a private equity fund manager based in Boston. AEW developed Daylesford in partnership with Springfeld, Pa.-based seniors housing operator Sage Senior Living. Private equity frms like AEW continue to commit new capital to seniors housing — partly motivated by the strong performance of communities like Daylesford. However, high prices for seniors hous- ing properties are steering private equity funds away from new, fully leased proper- ties. Instead, private equity funds are pouring their billions of dollars into ground-up seniors housing developments or into existing proper- ties that can be improved to add value. Favorable fundraising environment Private equity funds have a lot of money to spend on seniors housing. Often the money comes from institutional investors such as pension funds, foundations and endowments, which contribute hundreds of millions to these private equity funds. For example, in July 2014, AEW closed the fundraising for its second seniors hous- "The lease-up has been very strong," says Chris Kazantis, director for AEW Capital Management. Daylesford Crossing is a new seniors housing community in Paoli, Pa., developed by AEW Capital Management and Sage Senior Living.

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