Fundamentals

• People over 65 make up nearly 14% of total population, according to the latest federal data, with a forecasted increase to 18% of the country by the year 2030.
• Over the past 20 years, institutions have creeped into the marketplace, primarily through private equity funds, REITS and agency financing from Fannie, Freddie and HUD.
• Existing product within the US averages approximately 18 years of age, which together with advancements in technology and new construction, has lead to significant physical and functional obsolescence.
• As the next generation of seniors transitions into Senior Housing, diversification of product based upon specific levels of care, Independent & Assisted Living and Memory Care, has forever changed the face of Senior Living into a more functional and attractive alternative to in-home care.
• An escalating decline in caregiver to senior ratio, increased regulations and minimum wage legislation have combined to create significant barriers to the long term success of the in-home care or “age in-place” model. 

Investor Perspective

• An emerging commercial real estate asset type that will eventually be considered a “core real estate asset class”
• Becoming more understandable and transparent
• Ample debt and equity available for the sector
• Investor interest is growing and the market is more liquid
• Sizeable risk premium compared to other asset types•Outperformed other commercial real estate property investments during the past 10 years
• Three of the 15 largest REITs are now health care REITs
• Resilient real estate sector during the economic recession
• Strong outlook for market fundamentals

Market Trends

• Increased flow of insitutional, private and foreign capital
• Over supply concerns from new construction
• Increased wages and benefits impacting operating margins   
• Improvements in technology generating operational effciencies
• Transaction volume effecting sales prices and yields
• Cost of capital pushing underwriting parameters