MIAMI—Kayne Anderson has a knack foridentifying the best markets to enter for healthcare real estate.The firm also has its finger on the pulse of shifting dynamics, asyou read in the first two parts of this series.


For our final installment of this exclusive interview, once again caught up with Al Rabil,CEO of Kayne Anderson Real Estate Advisors(KAREA), one of the most active private buyers ofhealthcare real estate, to find out what's in the firm'ssecret sauce. You can still read the first two articles inthis series: A CRE Opportunity Too Big to Ignore andHow to Break Down Healthcare Real EstateBarriers.

| How do you identify the best facilitylocations-to-be for both senior housing and medicaloffice?


Rabil: We seek to identifydistressed, mismanaged, or undercapitalizedproperties and unlock value. For medical office,factors include location, in particular a property's proximity to amajor hospital or healthcare institution, demographics of thenearby population, existence of adjacent land parcels, transactionsize, barriers to entry—including whether the state has aCertificate of Need requirement—and the structure of in-placeleases. For senior housing, factors such as ageand financial demographics of the surrounding population, influx ofadult children to the area, proximity to hospital/medical center,referral sources, barriers to entry, and location are allconsidered.

| With a market of newly-insuredcitizens, the healthcare industry has experienced renewed profits.How is this affecting the sector?


Rabil: The sector is flourishing for manyreasons, and the increase of insured citizens may be one. Obviouslywith more people insured, there are more medical appointments,tests and treatment, as well as preventative visits occurring—allof these contribute to the increase demand for outpatientfacilities.

| How is demographic shift from the“greatest generation” to the “baby boomers” changing the variousproducts?


Rabil: In both senior housingand medical office, we are constantly evolving to accommodate theneeds of our residents, our tenants and their patients. Weanticipate that as the greatest generation ages out and the boomergeneration becomes more a part of our clientele in both sectors,needs and wants will change and we will adapt as necessary. However, many of our projects are anticipating such a shift in theend users.

| What is KAREA's competitive advantage inthe healthcare related real estate market?


Rabil: Our relationships with best in classpartners in both medical office and seniorliving, as well as our vertically integrated teamincluding experts in acquisitions, asset management, constructionand engineering, legal, accounting and marketing, enable usto source off-market deals, negotiate long term leases and maintaineffective management of our properties.


The result of this combination is a near or fully-leased,well-managed property that is attractive to prospective residentsand tenants and can demand increased prices in the future. Thistranslates to higher returns for our investors and ultimately, anattractive product for disposition.

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