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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www.seniorshousingbusiness.com 43 August-September 2015 n Seniors Housing Business Senior Capital Advisors Bruce M. Gibson, Principal 305-606-8662 C bgibson@srcapadvisors.com www.srcapadvisors.com Having closed more than $2.25 billion in transactions involving the senior housing industry's most successful owners, operators and investors over the last 17 years, SENIOR CAPITAL ADVISORS is uniquely positioned to assist your firm with acquisitions, dispositions, sale/leasebacks, deb and equity placements and joint venture structuring. Please contact Bruce Gibson to schedule a meeting at the NIC Conference in Washington, DC SENIOR CAPITAL ADVISORS When Results Really Matter, There's Only One Choice: Proven Results Access to Top Level Decision Makers Strong, Trustworthy Relationships Confidential Transaction Management Expert Negotiating Skills Highly Targeted Marketing Campaigns Superior Industry Knowledge Integrity, Creativity & Tenacity Client Focussed Approach About the writer Bendix Anderson, a New York-based freelance writer, has covered the commer- cial real estate industry for more than a dozen years. Investors are interested enough in value-added seniors housing properties to commit dollars to relatively new private equity funds. In January, ROC Seniors Hous- ing Fund Manager announced that it had raised an additional $137 million in equity, raising its total commitment to $450 million. The money is specifcally target- ing seniors housing and medical properties in the U.S. ROC is quickly putting this money to work. It acquired about $390 million in seniors housing properties in 2014 and early 2015, and has a strong pipeline of prop- erties to acquire. "Our objectives are to provide high current income and capital appreciation by acquiring and optimizing properties through capital investment and resident service," says Robert Morse, chairman of Bridge Investment Group Partners, ROC's parent company. Bridge has a long history in the apartment business, owning and managing a portfolio of about 32,000 apartments, including seniors housing units. New development beckons Private equity funds focused on seniors housing are also investing more of their capital in ground-up development than in the recent past. "The returns are pretty enticing," says Mace. PREI, for example, is able to allocate up to 20 percent of the capital in SHP V to new develop- ment. That's up from 10 percent in SHP IV. "Because of the competitive landscape, private equity funds are making much heavier allo- cations to development," says CBRE's Will. Other private equity funds that once invested 20 to 25 percent of their capital in new development now invest 30 to 40 percent. "They can't get their returns anywhere else," says Will. n NCREIF annualized total returns by select property types (periods ending 6/30/15) The seniors housing sector continues to outperform the National Council of Real Estate Investment Fiduciaries' National Property Index (NPI), which tracks total returns among institutional-quality assets across the major property types. For the 12-month period ending June 30, the total return for seniors housing sector was 15.5 percent compared with 13 percent for the NPI. Over the last 10 years, total returns for seniors housing averaged 14.2 percent compared with 8.2 percent for the NPI. 1 year 3 years 5 years 10 years Source: NCREIF, NIC MAP® Data Service 16 14 12 10 8 6 4 2 0 ■ NPI ■ Apartment ■ Hotel ■ Industrial ■ Ofce ■ Retail ■ Seniors housing Total returns (%)

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