Investor interest in senior housing remains strong and will continue for the foreseeable future, but the marketing period for assets has grown longer. This may signal a growing disconnect between buyers and sellers, but also reflects the expanding investor pool and current headwinds hitting the sector.
Increased marketing time was among the findings of the Seniors Housing & Care Investor Survey and Trends Report, released earlier this month by global commercial real estate and investment firm CBRE. Thirty-nine percent of the survey’s respondents indicated the marketing period for senior housing assets has increased. The main culprit is a lack of available product on the market, CBRE Senior Managing Director for Valuation & Advisory Services and National Practice Leader for its Seniors Housing & Care specialty practice Zach Bowyer told Senior Housing News.
But there are other factors at play.
When marketing a senior living asset for sale, each state and property type has a unique set of challenges, Knapp Group Senior Housing Advisors Founder and Principal Jim Knapp told SHN. Michigan-based Knapp Group focuses specifically on senior housing transactions, and works under the umbrella of Marcus & Millichap.
But while each property has its unique characteristics, there are some common themes at the moment that are forcing even the most seasoned buyers to be more cautious in their underwriting.
“There are interest rate increases that are going on and occupancy challenges because of new development over the past 36 months,” Knapp said. “One of the biggest challenges we hear a lot about is staffing matters that buyers and sellers are having to address.”
As a result, brokers are finding themselves educating prospective buyers more about the specific markets they wish to enter.
Read the full story at Senior Housing News.