Focus Healthcare Partners is seeing an environment that is ripe for new investments and acquisitions following the recent completion of fundraising a $370 million fund.

Called Focus Senior Housing Fund II LP, the new fund is around 20% larger than the firm’s previous fund completed in 2021 and took around two years to complete.

The new fund could propel the company to its most active investment year since it was founded in 2010, according to Principal and Co-Founder Curt Schaller – and that has much to do with the current landscape for new transactions.

“It’s the best investment environment I’ve seen in the 25 years I’ve been in senior housing,” Schaller told Senior Housing News.

The fund is going to be used primarily for acquisitions in the active adult, independent living, assisted living and memory care sectors. The company will make those investments alongside some new development, though those will likely be “unique opportunities,” Schaller said. The approach will follow a similar strategy to Focus’ first fund, though the opportunity for investments is better this time around, he added.

“[There’s] a whole host of opportunities on the core-plus side,” he said. “You’re just really seeing the ability to buy quality Class A assets at attractive qualified cap rates below replacement cost which, frankly, isn’t a dynamic we’ve seen in the last 10 years.”

There are a variety of reasons for this level of investment opportunity for Focus, including record lows on construction starts, the impact caused by the Covid pandemic and the number of maturing debt loans forcing some operators and owners to sell properties.

Contrasting the state of real estate capital markets, the demand fundamentals of senior housing are “as strong as they’ve ever been” with the incoming baby boomer generation, Schaller said. He added Focus is seeing returns on investments between 300 and 400 basis points higher than just five years ago.

“You’re just looking at a very unique investment market,” he said.