Despite seeing lower occupancy levels through the pandemic, senior living investors are seeing some light at the end of the tunnel, according to panelists at last week’s Leadership Huddle of the National Investment Center for Seniors Housing & Care.
It’s still too early to tell what is going to happen with the market, Blake Peeper, partner/co-chief investment officer at Bridge Seniors Housing Fund Manager, said during the session titled “Seniors Housing Equity Players Talk Investment Strategy.”
“We’ve had a real hit to occupancy, yet the medium and long-term outlook from a fundamental perspective is really quite strong. We’re generally bullish,” he said. “When we get to a point whereby the gap between where we are today and stabilized value shrinks some and shrinks to a point where those types of deals are financeable in a reasonable manner, I think then you really open the market back up.”
Dustin Warner, director in the transactions group at Harrison Street, noted that move-in rates are at their highest level since the pandemic, and leads are increasing as well. Those trends were mentioned on many first-quarter earnings calls of providers and real estate investment trusts investing in the long-term care industry.
“You’ve got somewhat of a runway here to work with. You combine that with what we perceive as a pent-up demand, a year of residents that want a place to live, and it’s kind of a nice, optimistic landscape for the future, in my opinion,” he said.
Warner said that the acquisition pipeline, which had dried up by late March 2020, has begun to see new life as debt markets opened up.
“We ended the year with over $1.6 billion in new senior housing investments across development and acquisitions,” he said. “Owners will eventually become sellers, even if they do so a little earlier than they’d like.”