April 24, 2019
Private investors have moved to the forefront of senior housing investment, spending $6.2 billion in 2018 as REIT’s continued to pull back, to $4 billion. That was just one finding in the April 2019 Senior Housing Snapshot report by Real Capital Markets (RCM).
Senior housing investment and construction in the U.S. slowed slightly in the first part of 2019, but investors expressed confidence in the long-term outlook for this sector, according to the report. The top states for senior housing sales in 2018 were Florida ($1.5 billion), Texas ($1.1 billion), California ($1 billion), New York ($906 million), and Ohio ($766 million).
RCM’s Tina Lichens says, “The sector as we know it today is vastly different from five years ago, and rapidly changing. There remains considerable demand and capital in the market, yet investors need to look at the long-term as the market redefines its new normal.”
Other findings of RCM’s report include:
– U.S. investment sales dipped — to $2.8 billion in the first two months of 2019, from $3 billion in the same time period in 2018. This follows $15.2 billion in sales for all of 2018, according to Real Capital Analytics data used in the report.
– Construction is down—New deliveries declined by 14.8% from 2017 to 2018; experts consider this a needed slowdown, as demand catches up to the strong supply cycle.
– More than 61% of investors agree a strong operating partner is key, given the industry concerns regarding a labor shortage, cost management and shrinking profits.
The national report incorporated sentiments of investors and brokers across the country, as well as statistics from Real Capital Analytics and research from the National Investment Council for Seniors Housing & Care.
For comments, questions or concerns, please contact Dennis Kaiser