Saturday, February 4, 2023

This Top Dollar Senior Housing Deal Rides Surge of Record-Breaking Demand

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A California firm entered Arizona with a high greenback buy of 4 senior housing properties, the most recent signal of report demand from an getting older inhabitants across the nation for a kind of actual property strongly rebounding from pandemic declines.

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Clearwater Living, primarily based in Newport Beach, California, and joint-venture accomplice PGIM paid $255 million to purchase the properties in Phoenix, Scottsdale and Gilbert totaling 554 models from Tempe-based multifamily developer Liv Communities, in response to public sale paperwork. Representatives of LivCommunities did not reply to a request to remark.

The sale of the impartial residing, assisted-living and reminiscence care properties is the very best whole worth on report paid for a senior housing portfolio in Arizona, and one of the biggest within the United States this yr, in response to CoStar knowledge.

It comes as senior residing services are getting purchased throughout a spread of areas. And these properties are poised for elevated demand over the following 10 years because the child boomer inhabitants ages and retires, in response to the National Investment Center for Seniors Housing & Care, higher generally known as NIC.

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“Private owners and operators remain the most active acquirers in the seniors housing and care market as they look to build local and regional scale and efficiencies,” Ben Swett, senior care analyst at Irving Levin Associates, a New Canaan, Connecticut-based consulting agency that tracks the sector, mentioned in an announcement with its third-quarter market report. “Private capital continues to flood into the skilled nursing sector at very high per-bed values, as well.”

Renter demand for senior housing models elevated within the second quarter on the strongest tempo ever recorded, rising practically a full share level from the primary quarter to 81.4%, and up by 3.5 share factors from its pandemic-related low of 78% within the second quarter of 2021, NIC Chief Economist Beth Mace mentioned in an electronic mail.

Nearly 80% of the models that had been vacated on the peak of the pandemic have been reoccupied for the reason that second half of final yr, Mace mentioned.

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Another cause for the heightened demand is a slowdown in senior housing development in Phoenix and throughout the United States for the reason that onset of the pandemic. The roughly 35,000 models underneath development within the second quarter throughout the 31 U.S. cities tracked by NIC was the fewest for a second quarter since 2015, in response to Mace.

Demand for expert nursing, assisted residing and different long-term housing for seniors has boosted occupancy charges and funding gross sales, which approached $19 billion in 2021, the strongest yr since 2015, in response to a Colliers report.

Among the opposite excessive greenback senior housing and care services offers this yr, an affiliate of Rood Investments of Vancouver, Washington, sold a three-property portfolio of senior-living services in Vancouver to Toledo, Ohio-based healthcare REIT Welltower for practically $225 million in April.

In October, CareBelief REIT, a California firm that acquires and leases senior housing and healthcare properties nationwide, bought seven skilled nursing and seniors housing complexes in Ohio totaling greater than 700 beds to a regional operator for $52 million.

Rents for each housing and nursing care rose between 2% and a couple of.4% in 2021, Aaron Jodka, nationwide director of capital markets analysis at Colliers, mentioned in an electronic mail.

Clearwater mentioned in an announcement that “our acquisition of these four Arizona-based communities reflects our ambitious expansion into a new state and our continued evolution as a company.”

Clearwater additionally owns and operates 5 senior care services in California and Nevada, in response to its web site. Its growth is simply starting, with the corporate trying so as to add properties in a number of Western states, Clearwater Living President Danielle Morgan instructed Senior Housing News earlier this month.

The firm skilled sturdy leasing that beat expectations throughout the worst of the pandemic, Morgan added.



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