Growth in Senior Housing, Independent & Assisted Living Facilities
Recent data from the National Real Estate Investor (NREI), a leading authority on trends in the commercial real estate markets, and Seniors Housing Investment Advisors, show that the senior housing sector posted near-record sales numbers in 2011. Investment transactions among senior housing properties rose 340% in 2011 to a total of $27.8 billion across both senior housing and nursing care properties, according to data from New York-based Real Capital Analytics.
What’s more, the senior housing occupancy rate continued its gradual recovery in the first quarter of 2012, according to the National Investment Center for the Seniors Housing & Care Industry (NIC). Overall, the average occupancy rate for senior housing properties in the first quarter of 2012 was 88.4%, an increase of 0.2 percentage points from the prior quarter and a 0.8 percentage point increase from a year earlier. Furthermore, the occupancy rate for independent living properties in the first quarter of 2012 averaged 88.3 percent, and the occupancy rate for assisted living properties averaged 88.6%. Both independent and assisted living properties showed improvement over the previous quarter, rising 0.3 and 0.2 percentage points, respectively.
What’s driving this activity? Improving property fundamentals combined with strong demographics – the graying of America – which is fueling the demand for investment in these types of properties. In fact, REITs, specifically, have exhibited an appetite for senior housing properties. REITs alone completed more than $20 billion in acquisitions in 2011.
“If you look at the number of people who are turning 65 and older, that supports a lot of growth in senior housing for many years out,” says Sharon Yester, head of asset management for CNL Financial Group, based in Orlando, Florida. “I think what we have is a wide open field for the types of assets that we like.”
Growth in this area is an opportunity for agencies around the country to expand their footprint in this market by providing insurance and risk management services to senior housing, independent living and assisted living properties. At Caitlin-Morgan, we provide a number of key insurance solutions in this space. Please contact us at 877.226.1027.