Why senior living is attracting new interest

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Organizations specializing in multifamily housing, as well as private equity firms, commercial banks and insurance companies, increasingly are turning to the seniors housing sector for four reasons, according to mortgage banking and investment sales and servicing company Berkadia:

  1. The timing is right, as investors hope to lock in low interest rates now.
  2. Senior living offers the best return on investment among specialty sectors right now, due to operations and profit margins of up to 50% generated by revenue.
  3. Significant sources of debt and equity capital, including Fannie Mae, Freddie Mac, private equity firms and real estate investment trusts, are available now.
  4. The over-80 population is expected to grow to 28.5 million by 2040 as the baby boomers age and enjoy increased longevity of life.

“New entrants into the seniors housing space — in particular multifamily companies and private equity firms — are actively seeking new construction and acquisition opportunities in this sector,” said Christopher Honn, senior managing director of Berkadia's Chicago office. New entrants in the sector “can be very successful,” he added.

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