Seniors Housing i Ohio

RCM: Investors still keen on seniors housing

RCM: Investors still keen on seniors housing,ph01

Investment and construction activity might have slowed in the first quarter for the seniors housing market. But this doesn’t mean that investors have lost any confidence in the sector.

According to the April 2019 Senior Housing Snapshot released by Real Capital Markets, private investors spent $6.2 billion in 2018 on seniors housing facilities. Public REITs pulled back a bit, but still invested $4.7 billion in this asset class during the same time, according to Real Capital Markets’ report.

The total investment in this sector for 2018 hit an impressive $15.2 billion, according to the report.

The Midwest only showed up once on the list of top states for seniors housing sales. That was Ohio, which ranked fifth with $766 million of seniors housing sales last year. Florida topped the list with $1.5 billion of sales in this sector.

Real Capital Markets reported that in the first two months of 2019, U.S. investment sales in the seniors housing sector hit $2.8 billion. That’s down from $3 billion in the same time period a year earlier.

“The sector as we know it today is vastly different from five years ago and rapidly changing,” said Tina Lichens, chief operating officer of Real Capital Markets, in a written statement. “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.”

Daniel Walsh, senior vice president in the Chicago office of Ryan Cmopanies US, Inc., said that the seniors housing sector remains healthy and that he is optimistic about its future.

“Demand, and consistent growth in demand, will be one of the fundamental building blocks of strong performance for the sector,” Walsh said. “The capital markets are really positive. There is a healthy pipeline of capital looking for placement.”

The occupancy rate for seniors housing buildings remains strong. Real Capital Markets reported that in Chicago, the occupancy rate stood at 85.9 percent in the first quarter of 2019, while in Cincinnati it dipped, but just a bit, to 88.7 percent.

The occupancy rate in Cleveland stood at 82.7 percent in the first quarter of 2019 and at 86.1 percent in Detroit during the same quarter.