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 77 August-September 2015 n Seniors Housing Business SENIOR CARE M A RKETING SALES SU MMIT THE LEADING SENIOR CARE HUMAN RESOURCE SUMMIT THE LEADING SENIOR CARE SALES & MARKETING SUMMIT ALIGN. ENGAGE. INSPIRE. VISION. COMMAND. RESULTS. OCT. 13-15, 2015 HILTON CHICAGO I N D I A N L A K E S R E S O R T seniorcarehrsummit.com Two Cutting Edge Summits. One Location. seniorcaremarketingsummit.com CCRC? What geographic areas are most active? McMurtry: With the excep- tion of entry-fee CCRCs, we are seeing large numbers of transac- tions across the board, and in all regions. Relative to past sale num- bers, even the number of entry-fee CCRC transactions is high. Stahler: The majority of the transactions we have recently completed are in assisted living and skilled nursing. The major metro and coastal markets will always be the most attractive — that's real estate 101. With that being said, recently we have seen a lot of attention turn to secondary and tertiary mar- kets for several reasons. For one, typically there is less competition in the bidding process. Secondly, there is much less competition once operating the asset. We work with buyers that specifcally seek out the rural markets with only one or two facilities in town. While the barriers to entry remain low and there's defnitely a risk factor, it is much easier to beat out one or two competitors than 10 or more. Clousing: As the population of the country continues to shift to core markets, many of our rural cities and counties are experienc- ing a population decline, which creates a diffcult environment to transact. This is particularly true for aged and ineffcient skilled nursing assets that have seen their quality mix deteriorate as newer options enter the market. This often comes in the form of high-acuity assisted living attract- ing the private pay residents. Gibson: All segments of the seniors housing market are see- ing strong activity, but interest in each segment is fueled for differ- ent reasons. Most of the focus for both development and acquisi- tion during the last few years has been in the assisted living/ memory care segment. However, numerous groups have switched focus to the independent living segment to pursue yield. This extra yield sometimes comes in the form of an assisted living/ memory care expansion to — or conversion of — the existing independent living community. Those communities with the opportunity to push yields via conversion and/or expansion are receiving the most attention. Myers: Our activity has been balanced across those product types, with a few larger port- folios skewing the balance at times. We also fnd a balance between transactions in all major geographic regions of the U.S. It seems that there are age- and income-qualifed seniors in all markets, a growing knowledge of the various housing options and a desire to stay near adult children and grandchildren. While Florida, Texas, Arizona, Nevada and certain other regions continue to attract seniors due to more favorable winter weather conditions and other factors, it is also a known fact that some of the largest and most successful retirement communities are in New England, Chicago, Boston and Portland. Development is in high gear SHB: In addition to the high acquisition volume, a lot of new development is also underway. Will all the new deliveries over the next year or two balance out supply and demand? Swartz: While there are certain submarkets that have hit a satura- tion point, we feel that much of the concern of overbuilding is overblown given the very local dynamic of supply and demand for seniors housing. We still see many underserved market areas where new development is well supported. To the extent that

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