It’s still too early to tell whether changes in cost of capital and the anticipated uptick in interest rates will influence senior housing asset prices and cap rates, according to HCP, Inc. (NYSE: HCP) President and CEO Lauralee Martin.
Martin sat down with REIT.com at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas to discuss pricing themes that the health care real estate trust (REIT) had noted during investor meetings at the event.
“I think investors are curious as to whether the cost of capital for REITs and potentially the rise in interest rates, whether assets are going to reprice,” she said. “I would say it’s a little early to make that call.”
Still, Martin said there might be signals that asset prices face adjustment.
“We’ve seen large portfolios come to market and get pulled, so maybe that’s an early sign that there are going to be adjustments to price,” Martin said.
Pricing proved a common thread during REITs’ third-quarter earnings calls, with even Welltower Inc. (NYSE: HCN) stating that soaring price tags have sidelined the REIT on major deals. And other CEOs, including Rick Matros of Sabra Health Care REIT (NASDAQ: SBRA), also commented that deals have been brought the table and withdrawn.
Written by Kourtney Liepelt