EXPERT OPINION: A Conversation with Phil Anderson and Rick Swartz

November 2, 2011

In this “Expert Opinion” interview with Phil Anderson, Senior Managing Director; and Rick Swartz, Executive Vice President of Cushman & Wakefield Sonnenblick-Goldman, these industry leaders discuss debt and equity for seniors housing, the recent success of senior housing health care REITS, past acquisitions and more.

Phil Anderson, Cushman & WakefieldWatch the video      Read the transcript

Phil Anderson is a Senior Managing Director of Cushman & Wakefield Sonnenblick-Goldman and Co-Heads CWSG’s Senior Housing Practice. Mr. Anderson joined the Company in 2011 and is responsible for originating, structuring, selling and placing debt and equity investments nationally on Senior Housing and Healthcare related properties. Prior CWSG, Mr. Anderson served as Chief Operating Officer and Executive Vice President of CNL Retirement Properties, Inc., a $5.3 billion real estate investment trust (REIT) focused on senior housing properties and medical facilities. Prior to joining CNL, Mr. Anderson worked with Hyatt Hotels, Classic Residence by Hyatt, and the Pritzker family from 1985 until 1998. As senior vice president of development and acquisition for Classic Residence by Hyatt, he oversaw the development and acquisition of upscale seniors’ housing facilities, including over $300 million of new development.
Mr. Anderson received a B.S. with honors in Civil Engineering from the Georgia Institute of Technology. Mr. Anderson has been a member of the American Senior Housing Association since 1994. In addition, he has served as a member of the board of directors of the National Investment Center for the Seniors Housing and Care Industries (NIC) and as a board member to Westminster Retirement Communities, a not-for-profit operator of continuing care retirement communities. Mr. Anderson has also served his community as an elected City Commissioner for the City of Winter Park.
 

Rick Swartz, Cushman & WakefieldWatch the video      Read the transcript

Richard Swartz is an Executive Vice President and Principal of Cushman & Wakefield Sonnenblick-Goldman, Co-Heads CWSG’s Senior Housing Practice and heads the firm’s Boston office.  Mr. Swartz joined the Company in 2003 as a Managing Director and Principal responsible for originating, structuring and placing debt and equity investments nationally.  In 2007 he opened the firm’s Boston office where he continues to serve the firm’s clients nationally as well as focusing on Boston area real estate operating companies and institutional investors.
Prior to CWSG, from 1998 to 2003, Mr. Swartz was a Managing Director at APC Realty Advisors where he had headed up all equity and debt placement activities nationally and was directly involved in over $3 billion in debt and equity transactions. Prior to APC, Mr. Swartz was involved in the structuring and underwriting of mezzanine investments first at Lazard Freres and subsequently at Capital Trust. Previous to these activities, he spent seventeen years as a pension fund advisor, including eight years at TCW Realty Advisors, where he executed various equity, joint venture and debt investment vehicles. 
Mr. Swartz has a Bachelor’s Degree in Political Science from Cornell University and a Master’s in Business Administration from the Wharton School of the University of Pennsylvania. He is a member of the Urban Land Institute and the International Council of Shopping Centers.

 

Contact Information:
Phil Anderson
Senior Managing Director
Cushman &Wakefield Sonnenblick Goldman
(p) (407) 541-4421
phil.anderson@cushwake.com

Rick Swartz
Executive Vice President
Cushman & Wakefield Sonnenblick Goldman
(p) (617) 345-0401
richard.swartz@cushwake.com

 

Watch the video of the interview: 


 


 

Read the interview transcript:

Steve Monroe:
I’m sitting here with Phil Anderson, Senior Managing Director; and Rick Swartz, Executive Vice President of Cushman & Wakefield Sonnenblick Goldman.  The company has been around for quite awhile; as a combination not quite awhile.  So Rick, why don’t you tell me a little bit about the Sonnenblick Goldman part, it is a little bit new to me and maybe some other people, but everyone knows Cushman & Wakefield.  Give a little brief history of Sonnenblick Goldman.

Rick Swartz:
Sure.  Sonnenblick Goldman is a 100+ year old real estate investment banking firm.  Our focus over the years has been raising capital, primarily for private operating companies, which involves everything from equity, mezzanine capital and debt capital, along with, over the years we have done investment sales.  About four years ago, Cushman & Wakefield acquired a majority interest in the firm.  They completed that acquisition about a year ago, so now we’re a wholly owned affiliate.  The focus across most product types again is the debt and equities spectrum, although in lodging we do have a more holistic approach where we include investment sales, and that’s really the model we’re using for the senior housing space.

Steve Monroe:
So you will continue to do debt and equity for senior housing, but then are you really going to focus on the M&A side of it?

Phil Anderson:
I think mostly what we’ll be looking at is providing debt and equity for our operators, and not so much mergers and acquisitions, although we will be doing advisory work.  But kind of providing capital for growing operators, capital for them to make acquisitions, and then we’ll also be handling sort of the round trip of investment sales on behalf of funds and/or owner operators that are ready to move to the next level.

Steve Monroe:
And what kind of owner operators are you talking about?  Are you talking about skilled nursing, ILAL, everyone?

Phil Anderson:
You know, it’s really the whole spectrum.  We’re working predominantly with assisted living and independent living owner operators.  We are working on a few things in the skilled nursing space, and also in the continuing care retirement community space.  So it’s really the whole continuing care spectrum.

Steve Monroe:
And then how is your group going to work with the Cushman & Wakefield brokers, who do the single properties and the small portfolios already. There’s always been kind of a fledgling seniors housing group in there.  Are you going to work with them, or are they a part of you?

Rick Swartz:
Sure, we’ll be working with them.  Often it’s multi-family housing specialists who are operating in the various regions around the country where we have offices, where they may have a relationship that involves a senior housing aspect. Then we’re teaming up with them to do those executions, and often we’ll be bringing them in as well to provide local expertise.  So when we have a client that may be working on projects in different markets, we can team up with them as well.

Steve Monroe:
If they come in contact with a large deal, will that be something that will be definitely up-streamed to your group?

Rick Swartz:
Sure, if it’s a senior housing deal, then yeah, we’d be involved.

Steve Monroe:
All right. So it’s been five years since you sold CNL Retirement Properties for an extravagant price.

Rick Swartz:
It was a great value to the buyer.

Steve Monroe:
A great value to the buyer, we all know that, but at that time that was one of the biggest deals ever in the seniors housing business.  How have you seen things change since then?  It’s been about five years.

Phil Anderson:
You know, I think that was really a market-changing event.  I mean, it led to really catapulting the senior housing healthcare REITs into a new strata and making them competitive with the core market REITs. I think that has really just accelerated.  I mean, it’s a great thing for the industry to have really strong REITs out there that can sort of set pricing guidelines and expectations for the top of the market, and I think that has led to a lot more intelligent pricing, probably throughout the industry.

In the last five years, there’s been a lot of consolidation, as everyone knows, and I think it’s resulted in much stronger operators.  You’re starting to see some economies of scale.  The important companies have actually gone through some tough times and have survived. I think that’s really important as well.

Steve Monroe:
Yeah, that was actually pretty remarkable in the last three years. Speaking of the consolidation with the REITs, we had a very active first half of this year on the M&A side from the very slow first half of 2010.  I’ve seen a kind of slow down from mid-summer on.  Have you guys noticed the same thing?

Phil Anderson:
Well, I think that the activity level kind of gets grouped into different buckets, as you know.  There are certainly the REIT quality assets; those pools and portfolios will occasionally come to market.  I think it’s interesting that so many of them came to market in the last six months.  How many more of those are there to come?  I don’t know, but I do think the taxable REIT subsidiary rules have allowed these REITs to do more consolidation.  I think there’s a whole other market out there that is just beginning to start perking, and I think we’ll see more of those middle market transactions going into 2012.

Steve Monroe:
Do you think there’s going to be more consolidation among the REITs?  I mean, now we truly have the big three.  Then you have some much smaller ones, then you also have all of a sudden these new private ones, and the new CNL is not really a REIT yet, I don’t think.

Phil Anderson:
Well, actually, they do have a REIT that has just gotten through registration, and they’re going to be doing multiple product types.  I’ll let them speak on your show next time.  But how big is too big?  I don’t know.  You’ve got great leadership at the REITs right now.  I will tell you that I think the franchise value of being a REIT in a public market is tremendous.  It gives you great access to capital, and well-priced capital.  So I can’t say that there will be more REIT consolidation, because you have to have willing sellers and willing buyers, and I’m not sure there’s any willing sellers out there right now.

Rick Swartz:
And at a price they can agree on.

Phil Anderson:
Right.  But it’s a good thing for the industry.

Rick Swartz:
But again, the recent aggregation successes of the REIT acquisitions programs have been great for the liquidity market in general. This is because our private equity sources now, which is private equity but it’s really institutional equity, is I think much more comfortable with an exit strategy now.  So for them to team up with a middle market developer in creating new product and aggregating through acquisitions or development, they feel like there is a very viewable exit strategy, you know, three, five, seven years from now.

Steve Monroe:
Absolutely, absolutely. I mean, a lot of people think the next five years are going to be pretty active. It looks like you guys are going to be pretty well positioned for it. Are you currently hiring, and if so, what kind of people are you looking for?

Phil Anderson:
Actually, we do have growth plans.  We have offices in Boston, Orlando and San Francisco.  We’ll probably end up expanding a little bit more on the West Coast, as the volume dictates.  The kind of people we’re looking for are people experienced in multiple or varying types of finance and acquisition.  Most of our people come from the principal side, but we also have bankers as well.  Not necessarily senior housing experience, just the M&A, debt and equity.

Rick Swartz:
Yeah, most recently we brought in Aaron Rosenzweig.  Aaron was a healthcare banker for Sovereign.  So ideally, we would find people with that combined capital market experience and senior housing experience. 

Steve Monroe:
All right, well good luck.  Thanks for spending some time with me.

Phil Anderson:
Thank you.

Rick Swartz:
Thanks.
 

 

 

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