Investors Bank on Senior Housing Boom

September 16, 2013

As the housing market recovers, older home owners are selling. Investors predict a big growth in senior housing as a result. 

In the first half of this year, sales of senior multifamily housing properties—which include assisted living and congregate care facilities—grew to $1.59 billion compared to $1.18 billion a year ago, according to CoStar COMPs records. While sales have risen, prices remain lower. Per-unit sale prices have steadily fallen since peaking in the third quarter of 2011, dropping from about $88,000 per unit to $58,000 per unit, according to CoStar data. 

Still, investors are banking on a big recovery for the sector and redirecting their assets in anticipation of a senior housing boom.  Several major REITs are beginning to sell some of their commercial assets to raise money to redirect toward senior housing and care facilities, the CoStar Group reports.

"There are a lot of buyers in the market right now," says Scott M. Brinker, executive vice president of investments of the Health Care REIT Inc., one of the biggest players in the sector. "Like us, they're attracted by resilient returns and strong fundamentals.”

Source: “As Housing Rebound Helps More Retirees Sell Homes, Investors Prep for Increased Demand for Senior Housing,” CoStar (Sept. 11, 2013)

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