HCP CEO: Senior Living Sophistication Is Luring Investors

Senior Housing is continuing to attract new investors to the space, and it’s a trend Lauralee Martin, president and CEO of HCP, Inc. (NYSE: HCP) sees continuing in 2015.

The uptick in interest in the senior housing industry is two-fold, Martin told REIT.com in a recent interview, noting a rise in sophistication among operators and the similarities between the senior housing and apartment asset classes.

Pointing to HCP’s largest operator Brookdale Senior Living (NYSE: BKD), Martin said, “[Brookdale] is clearly advancing across the continuum of care to their residents, they’ve thought about branding so the image of what they want to deliver to those resents is understood and valued by both the children of residents as well as the residents — so that sophistication makes the industry very attractive.”

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Brookdale and HCP closed a $1.2 billion formation of a joint venture to own and operate continuing care retirement communities (CCRCs) in September of this year. And Brookdale’s $2.8 billion merger with Emeritus Senior Living Corp. (NYSE: ESC) completed in July made the company the largest senior living provider in the nation.

In addition, investors see that senior living shares many characteristics with a familiar asset class: apartments.

“It’s an asset class that is well known to many investors with [senior living having] some nuances that add some operator value to that space as well,” she told REIT.com.

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Succeeding in the changing health care landscape is tied to providing “high quality of care at the lowest cost,” she says, noting the impact of both Accountable Care Organizations (ACOs) and consumers.

View the REIT.com interview

Written by Cassandra Dowell

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