Seniors Housing Weekly Update - Seniors Housing Values Not In Sync

August 12, 2014


August 12, 2014. 60 Seconds with Steve Monroe. As seniors housing property values continue to rise, the publicly traded stocks are not sharing the same investor excitement....

Seniors Housing Values Not In Sync

It is hard to believe that 18 years ago there were 15 publicly traded seniors housing companies, plus another 21 skilled nursing companies. Today, we are down to just three seniors housing and six skilled nursing companies, and that may even shrink. One company, Brookdale Senior Living, has a market cap greater than all the other publicly traded companies – seniors housing and skilled nursing combined. One might think that with how hot the property acquisition market is, that investors would look to the public equity markets for some options, not to mention the liquidity it provides their investments. Although we forecast that the peak in the acquisition market will not arrive until 2015 or 2016, is it possible that with publicly traded stocks, we may already be there? From what we could tell, Brookdale turned in a pretty decent quarter, and it has great plans for its acquisition of Emeritus, but investors gave it a ho-hum shrug, even sending shares down a bit. Yes, the overall market seems to have hit a wall, but it just seems that investors are valuing the real estate of the industry at greater levels than the companies that own and operate that real estate. That spells a disconnect of sorts to us.  



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