Senior housing ROI surpasses that of other major real estate property types, according to a new report by CBRE National Senior Housing. The report looked at things like capitalization rates and investment returns and concluded that senior housing’s strong performance may be attributed to an increased risk that brings increased reward. The report also notes that, unlike other markets, senior housing experiences continuous rent growth despite fluctuations in the general economy.
Source: CBRE. Senior Housing Market Insight 2015 Mid-Year Review
From caregiving marketplace Honor to tech accelerator Aging 2.0, venture capital dollars are flowing steadily toward senior care. Famous Silicon Valley investors are investing in senior care tech, like Netscape co-founder Mark Andreessen, who invested $15 million in Honor, and Lotus founder Mitch Kapor, who seeded the tech startup True Link, an Aging 2.0 member. As Baby Boomers age, the so-called “longevity economy” is expected to grow to more than $13.5 trillion by 2032.
Source: CNBC. Top VCs Target $7 Trillion Senior-Care Market
Welltower (previously Health Care REIT) and Revera completed their acquisition of Regal Lifestyle Communities. Regal’s portfolio is concentrated in major Canadian markets. Welltower, one of the three biggest REITs in America, owns more than 1,400 properties in major, high-growth markets in North America, and the UK. Through its portfolio of partnerships, Revera owns or operates more than 500 properties across North America and the UK.
Source: Business Wire. Welltower and Revera Complete Regal Lifestyle Communities Acquisition Through Joint Venture
According to a recent AARP study, America is likely to face a shortage of 2.5 million caregivers by 2030. Many industry leaders look to immigration reform as a solution. Congress remains at odds about how to tackle immigration challenges, but senior living leaders advocate a proactive approach. In April 2013, Fred Benjamin, COO of Medicalogies, testified before a congressional subcommittee on behalf of the American Health Care Association highlighting the benefits of the proposed W visa program, which would admit low-skilled foreign workers. The AHCA has also urged increased access to temporary work visas for nurses and physical therapists.
Source: Senior Housing News. Senior Living’s Labor Crisis: Providers, Lawmakers Seek Solution Overseas.
A four-year joint venture marks new territory for real estate investment giant AIG. The partnership with First & Main marks their “most significant investment in the senior housing sector to date,” says Derrick McSwain, managing director at AIG Global Real Estate Investment. The first five projects of their four-year venture will close financing November 2015 and complete construction in Q4 2016.
Sources: Business Wire. AIG Global Real Estate and First & Main Announce a Four-Year Joint Venture to Develop, Own and Operate Senior Living Communities across the US; Senior Housing News. AIG Real Estate Enters Senior Living With Joint Venture.