Last year saw a bit more “evening out” among investor types in the senior housing M&A landscape compared to 2011, according to data from the National Investment Center (NIC) for the Seniors Housing & Care Industry.
With private equity accounting for 33% of the buying activity in senior housing and care in 2012, and 2013 showing an aggressive start with the $3.2 billion Health Care REIT acquisition of Sunrise Senior Living, NIC asked Lisa Widmier, managing partner at VantAge Pointe Capital Management & Advisory, Inc. how she sees the M&A landscape playing out during the rest of 2013.
“We view it as a favorable development that the REITS were not the primary “go-to” buyer in the sector during 2012,” said Widmier. “The onset of a more diversified investor base, including private equity/pension funds, indicates the ‘coming of age’ of the seniors housing sector.”
A broad appeal such as this, Widmier suggests, results in lower required returns as senior housing transitions from a “niche” real estate classification towards a core-plus classification.
Industry growth will be fueled by increased investor demand through the birth of new operating companies as well as the development of new communities, according to Widmier.
Looking at the short term, Widmier believes that investors desperate for deals will invest in the growth of existing operating platforms, and portfolios in order to reach their transaction volume goals.
Written by Jason Oliva