Senior Living News Wire

While the markets in Europe might be on the brink of collapse, across the pond, senior housing is seeing investment continue to grow, primarily from Real Estate Investment Trusts (REITs).

Data released last week at the National Investment Center for the Seniors Housing & Care Industry (NIC) annual event in Washington, DC, shows that $16.8 billion worth of transactions took place during the first half of 2011. Of the deals, REITs have been the dominant buyers, snapping up 93% of the nursing homes, 78% of assisted living properties, and 88% of the independent living properties.

These deals, along with the eventual needs of the 78 million baby boomers in the United States for some type of care, brought 1,800 attendees to the conference.  But even with a record number of attendees, leaders at NIC are still cautious not to get ahead of themselves.

“We’re excited [about the opportunity for seniors housing] but there is a lot of anxiety about the global economy and what the future holds,” said Bob Kramer, president of NIC, during a press briefing. “In terms of our sector, it’s very need driven demand and the demographic drives the senior housing fundamentals.”

The industry remains in its infancy, but NIC is well aware it needs to plan now in order to meet future demand and is looking to groom the best and brightest through its Future Leaders Council.

“[There is] a critical need for this sector to attract talent to the industry,” said Kramer.

Campuses such as Washington State University recently added a Senior Living Management class to its undergraduate curriculum, taught by executives and other professionals from four top senior housing companies that are headquartered locally in Seattle.

NIC is also reaching out to business schools like Wharton to develop programs tailored to the industry, to ensure those coming out of school are attracted to the industry and the growth opportunities it provides.

Even with the new initiatives, NIC’s focus remains on data and making sure investors have the detailed information they require to make investments. In its 21st year, NIC’s overall mission remains dedicated bringing more capital and efficiency to the sector. ”To bring that about there must be transparency,” said Kramer.

Looking at the number of investors in attendance last week, it looks like NIC has succeeded.

Written by John Yedinak

American Realty Capital Healthcare Trust, Inc., recently announced that it has closed on three income-producing properties for $60.9 million, representing the first part of a $68.9 million portfolio consisting of 12 healthcare facilities.

The initial three properties are a multi-specialty medical campus located in Carson City, Nevada, for approximately $29 million; a medical office building in Las Vegas, Nevada, for approximately $22.9 million; and an inpatient rehabilitation facility located in Phoenix, Arizona, for approximately $9 million.

These acquisitions are approximately 92% leased to 19 tenants, with about 11.5% of those tenants having leases that will expire before Dec. 31, 2016, and 32% of tenants with lease terms beyond 10 years from the closing date.

“We are very pleased to be closing on the purchase of these institutional quality healthcare facilities acquired through our direct relationship with the seller,” said Todd Jensen, Chief Investment Officer for ARC Healthcare. “These properties are consistent with our strategy of building a diversified portfolio of healthcare assets leased to strong national and regional operators on a long-term basis. Over half of the revenue is generated from organizations that carry investment grade credit ratings.”

The properties were closed through ARC’s sponsor, American Realty Capital V, LLC.

Written by Alyssa Gerace

Healthcare REITs are gaining steam as a property sector, having raised a total of $22.5 billion in the 18 month period ending June 30, a recent Jones Lang LaSalle report states. And in spite of the scale of the sector, healthcare real estate has only marginal penetration by real estate investors, the company says.

“Interest in healthcare real estate investment has grown over the last two years based on the superior performance of this asset class during the downturn,” said Mindy Berman, managing director of capital markets in Jones Lang LaSalle’s Healthcare Capital markets group. “The asset type has proven recession-resistant and we expect this asset class will continue to outpace all other product types as the strongest real estate sector if the economic malaise continues to plague the United States.”

With the estimated value of all healthcare real estate assets in the U.S. totaling $700 billion, the report states, public REITs hold 15% of the product in the market. “While REITs continue to aggressively acquire healthcare assets, a swell of new investors are maneuvering to purchase healthcare real estate,” the company says.

In terms of the $22.5 billion capital raise, the total comprises $17.4 billion in equity and debt capital, with non-listed healthcare REITs raising an additional $5.1 billion of capital during the same 18 months for a total of $22.5 billion for healthcare REITs.

“This is a disproportionate share of capital raised by healthcare REITs, as compared with non-healthcare REITS, added Joe Euphrat, managing director of Jones Lang LaSalle. “This reflects both a combination of the attractiveness of performance of healthcare real estate and prospective capital requirements that healthcare systems face.”

The top investors in medical properties year to date were the non-listed REITs, Jones Lang LaSalle reports. The three major REITS including Grubb & Ellis Healthcare REIT II, Healthcare Trust of America and American Realty Capital Healthcare Trust acquired 55 properties in total, which is more than a third of all medical office assets trading hands during the period.

Jones Lang LaSalle indicates that healthcare REITs are the top income producing property type among REITs, producing current average dividend yields of 5.3%.

Written by Elizabeth Ecker

Ziegler announced the addition of Rebecca Neth Townsend to its senior living and post acute care banking team based in Arizona.

Townsend will serve as its senior vice president and will focus on sponsorship structures for not for profit senior living and healthcare organizations as well as consulting and advisory opportunities in the space.

“We are honored to have Rebecca join our senior living team,” said Dan Hermann, Head of Investment Banking at Ziegler. “She has gained extensive knowledge of the senior living and healthcare spaces by developing and working within CCRC systems and providers of all types. She will add tremendous value to our team and to the clients we serve.”

Prior to joining Ziegler, she served as senior vice president of Covenant Retirement Communities, a multi-site system comprised of twelve CCRCs in nine states.

During her more than 25-year tenure, she filled a variety of roles in marketing, project and strategic development. She oversaw the concept development and feasibility stages for new locations, expanded locations, expanded services and acquisitions. This included the development of two completed green field CCRCs in Colorado and Michigan, an affordable housing project in Oregon, and the soon-to-be developed rental CCRC in Kansas.

She also was founding president of Covenant Solutions, the project development entity of Covenant Retirement Communities and guided the strategic plan for Covenant Ministries of Benevolence. Prior to her Covenant tenure, Rebecca was a hospital administrator and operations director.

“We’re very excited to have Rebecca join our west coast senior living team as we seek to serve clients through a broad array of advisory and banking services in this dynamic economy and evolving industry,” said Mary Munoz, managing director, Senior Living Finance at Ziegler.

Ziegler is an investment bank that provides a variety of services targeted at the senior living industry.

Written by John Yedinak