Seniors Housing Weekly Market Update

March 2, 2011

60 Seconds With Steve Monroe 
 

March 2, 2011. On Monday, February 28, Ventas and Health Care REIT announced one acquisition each totaling a combined $9.6 billion. Ventas is buying a smaller REIT, Nationwide Health Properties, while Health Care REIT is buying 147 skilled nursing facilities from Genesis HealthCare. The recent level of seniors housing and care investment activity by health care REITs is unprecedented.  

 

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Interesting indeed; good post.

Couple the huge transactions you describe to the funds looking for distressed who are starved for deal flow with the dearth of development and you have an interesting picture indeed. My wager is all values will increase and the supply pendulum is poised to swing. Other thoughts? best, Dan

Dan, I would think that those

Dan, I would think that those buyers who have been looking for distressed deals have had their fill the last two years, but I agree that with everything happening, prices in general should be trending up.

Appetite for distressed feels like it is unsatisfied

Admittedly, I don't have any kind of a handle on the market as a whole but I continue to get calls from a number of "funds" who sound a bit desperate for deal flow in the distressed arena. Unless the place should never have been built (and we can all name some examples of those), you can generate a fair amount of competition for distressed projects and should be able to drive the price up through competition. If that is true, the leap from buying an aged physical plant at a modest discount to sticking a shovel in the ground and building the right thing for the current market may not be so terrifying. We'll see and count on Mr. Monroe to inform us, as always. best, Dan

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