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 67 August-September 2015 n Seniors Housing Business Healthcare Leasing and Finance Solutions You Can Count On business, and we can provide the expert support you need to finance your equipment, fast. More than 20 years in business Specific market expertise & value proposition created for the not-for-profit aging industry Competitive finance rates, without the typical bank restrictions Leasing and finance solutions from $5,000 to $50,000,000 Ability to preserve existing credit lines & conserve working capital Financing for a wide variety of equipment types and technology solutions including: IT Hardware/Software Satellite TV Systems Telecom Systems Rehabilitation, Exercise & Therapy Equipment Healthcare Equipment Summit Funding Group - straightforward, fast and reliable leasing and financing solutions you can count on. 888-470-3902 | www.summit-funding.com At Summit Funding Group, we understand your the fastest growing cohort in the U.S. Yet the industry that caters to this demographic is highly fragmented and is characterized by a massive supply-demand imbalance. SHB: Against that backdrop, what's New Senior's strategy? Givens: By our estimates, there are approximately $300 billion of senior housing assets in the U.S., but nearly 70 percent of those properties are owned by "mom and pops" — operators that own fewer than 10 properties. We think we're uniquely posi- tioned to beneft from this dynamic because we seek to acquire these small, mom-and-pop assets, which generally aren't on the radar screens of our larger peers. What's more, 70 percent of our net operating income (NOI) comes from independent living assets, and these assets are really as close to multifamily as you can get. We like independent living because there's less regulatory oversight, the margins are higher and the average length of stay tends to be much longer compared to assisted living. In addition, we're seeing less new supply coming into the market on the independent liv- ing side, so that means less new competition. REIT's structural strengths SHB: New Senior is externally managed by Fortress Investment Group, which has $72 billion of real estate assets under manage- ment and is one of the most active frms in private equity real estate and capital raising. What does externally managed mean exactly and what's the signifcance? Givens: In the simplest of terms, New Senior has no employees. We are all employees of the manager, Fortress. However, even though we are all Fortress employees, our team — which includes acqui- sitions, asset management, legal, tax, fnance and other departments — is dedicated to working on New Senior. This arrangement enables us to leverage the extensive expertise of Fortress and it gives us access to the 15-year track record that Fortress has in the space, which is extremely useful when it comes to sourcing and structuring transactions. Importantly, it also gives us access to an incredibly talented pool of Fortress employees who have relevant M&A, corporate fnance, asset management, capital markets and legal expertise that can be tapped as the need arises. So, being externally managed gives us access to a broader pool of talent than would be the case if we were an internally managed company. SHB: Are there any other advan- tages of being externally man- aged by Fortress? Givens: Because of Fortress' relationship with major banks and brokers and Fortress' large-scale private equity platform, external management also gives us access to larger deals and enables us Sterling Court is a 130-unit seniors housing community in Deltona, Fla., about 30 miles north of Orlando. New Senior Investment Group acquired the facility in March and leases out the operations to Holiday Retirement.

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