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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70 www.seniorshousingbusiness.com Seniors Housing Business n August-September 2015 Hunt Mortgage Group fnances Healthcare / Senior Housing Communities nationwide. We have dedicated healthcare lending and underwriting teams to work with you on your transactions. As one of the industry's most respected commercial lenders with a 40-year proven track record, Hunt Mortgage Group clients beneft from our established relationships with property owners and developers, combined with our healthcare/senior living lending and underwriting expertise. Explore your financing alternatives, please contact: James Neil 512.329.1984 james.neil@huntcompanies.com LET HUNT MORTGAGE GROUP DEMONSTRATE OUR HEALTHCARE LENDING EXPERTISE huntmortgagegroup.com our focus on deleveraging and our commitment to growing divi- dends for shareholders. SHB: The REIT is less than a year old, so does name recognition become a factor in trying to attract investors? Givens: It's less about name recognition and more about having a number of quarters of strong performance that provides a track record. When you're a new company, it's not about the name. It's about making sure that shareholders understand the fnancial profle, what the pros- pects are and the potential of the business. Expect more organic growth SHB: With cap rates currently pushing so low and the price per unit so high (both set records in 2014 and are on pace to do so again in 2015), what impact does that have on your investment strategy? Givens: The environment for acquisitions remains extremely competitive and the cost of capi- tal has increased for REITs, so we continue to be very disciplined on the acquisitions front. While we have completed or announced $1.2 billion of acquisitions so far this year, we will likely focus more attention on organic growth of our existing portfolio versus new acquisitions in the near term. Fortress has experience invest- ing through various economic and capital market cycles. The long-term fundamentals of this sector are excellent, and we remain confdent we will con- tinue to fnd attractive investment opportunities over the long term. SHB: Does New Senior do ground- up development projects? Givens: We have not done any to date. As we grow and con- tinue to evolve, development is something that we may consider. But right now we're focused on cash-fowing assets that contrib- ute to our dividends. SHB: If acquisition prices con- tinue to generally rise and cap rates fall, does development become less risky? Givens: While the econom- ics can look favorable on a build-versus-buy basis, you have to account for the fact that it takes a few years to lease up the proper- ties. There's money going out the door to pay to develop the proper- ties, but you won't have money coming in from the properties for a couple years. Portfolio's vital signs improve SHB: What is the average occu- pancy rate across New Senior's portfolio as of the second quar- ter of 2015? Givens: The occupancy rate of our managed portfolio was 86.2 percent for the second quar- ter, which increased 310 basis points versus last year as a result of strong growth in the existing portfolio and the acquisition of a highly stabilized portfolio of independent living properties earlier this year. While this is lower than the industry average (NIC reports an average occupancy rate of 89.9 percent for seniors housing industry-wide in the second quarter), our strategy entails purchasing high-quality, though "undermanaged" properties, which tend to initially have lower occupancy. As our operators implement more sophisticated sales and mar- keting programs post-acquisition, along with benefting from lower Shads Landing, a 115-unit seniors housing community in Charlotte, N.C., features restaurant- style dining. The community, part of New Senior Investment Group's portfolio, was built in 2008.

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