[stock-ticker]

Senior Housing Transaction Volume Declines in 3Q; Public Buyers Dip

3Q16_data_blog_post_4

Senior housing transaction volume declined in the 3rd quarter of 2016, according to new data from the National Investment Center for Seniors Housing and Care (NIC).

Total volume in the 3rd quarter of 2016 (~$2 billion) is down 39% since the 3rd quarter of 2015 (~$3.4 billion), according to NIC estimates.

The dip in volume was fueled by public buyers, according to NIC Principal Bill Kaufmann. He writes:

The public buyer volume, usually dominated by the public REITs, continued to decrease in the third quarter, registering a 48% decline quarter to quarter, from $866 million to $448 million, and an even more significant 74% decline year over year. In comparison, the private buyer decreased by a much smaller 21% year over year.

 

As noted in the above excerpt, private buyers were fairly active. The volume of various buyer types is reflected in the chart, below:

October_19_blogKaufmann offers his thoughts on this data point:

What’s behind the resiliency of these private buyers? For starters, there is a large amount of private capital searching for yield given the continual low interest rate environment, so commercial real estate, which includes seniors housing and care, has had its fair share of buyers coming into the market. And compared to other commercial property types, seniors housing and, especially, skilled nursing properties have a larger cap-rate spread—higher expected investment returns—which presents a welcome opportunity for many private REITs, hedge funds, and other partnerships.

More reading:

Some good insights can be found on the webcast slides from the presentation reviewing the 3rd quarter results.

Additionally, another NIC blog post highlights the main takeaways from the new data dump.

 

Share This Post

Recent Articles

Powered by WordPress · Designed by Theme Junkie
Facebook IconTwitter Icon