Prudential Real Estate Investors is no stranger to senior housing investments, and its latest capital raise for investing in the sector has well exceeded its target, netting $629 million to be deployed.
The completed fund, Senior Housing Partners V, follows a series of funds launched under Prudential, and marks the largest fund to date. The $629 million exceeds the fund’s $500 million target to include $430.5 million from 10 existing investors and $198.5 million from four new investors that span both public and corporate pension plans.
The capital will be used to invest in independent living, assisted living and memory care units; through direct acquisitions, forward commitments, development, mezzanine loans and other opportunities. Prudential Real Estate investors noted the ongoing opportunity senior housing presents for its investment partners.
“Powerful demographic trends continue to support the high demand for senior housing, while the supply remains constrained,” says Noah Levy, head of PREI’s senior housing business. “As the overall economy improves, we expect that senior housing will continue to benefit.”
The company has not specified the exact investment targets for the fund, but says its operating partnerships are paramount.
“The most important thing is finding the intersection of really good product in good markets with great operators,” Levy tells SHN. “Those things need to come together. The operators, our partners, are a key to our success. No two operators are exactly alike.”
The fund will not specifically target communities that offer standalone services or care continuums, but all investment types available—including new development.
“We do like properties with multiple levels of service but that doesn’t mean something more specialized isn’t [of interest],” Levy says. “We don’t allocate by region or property type, but have had a good mix and balance and that has worked out for us.”
Among its past senior housing investment funds, Prudential Real Estate Investors has successfully closed SHP I at $183 million in 1998; SHP II in 2001 with $94 million in commitments; SHP III, closed in 2006 with $371 million in commitments; and SHP IV most recently, in 2011, with $569 million in commitments.
Two date, three of those funds have run their investment courses and have been liquidated.
Written by Elizabeth Ecker