SAN DIEGO—The geographic spectrum of senior-care communities covers every market in the US. Institutional investors will look to acquire properties in the top 25 US metros, while there is still a robust demand for newer assets located in secondary markets, Newmark Knight Frank senior managing directors Rob Black and Sean McNee tell GlobeSt.com. NKF recently hired the pair, who are recognized as national investment sales leaders within the senior-housing and care industry, for its San Diego office.

Black brings 21 years of commercial real estate experience to NKF, and McNee is a 17-year commercial real estate veteran. Black comes to the firm from Cushman & Wakefield, where he worked exclusively in the senior housing and care industry. McNee has been a leader at dedicated senior-housing brokerage teams at Eastdill Secured, Grubb & Ellis and, most recently, at Cushman & Wakefield.

We spoke with Black and McNee about the issues investors have regarding senior-housing and senior-care properties today.

GlobeSt.com: What are senior-housing & care investors most concerned about these days?

McNee: They're most concerned about overbuilding by inexperienced operators and developers that do not have experience in the sector. We have seen that before: people try to parachute in and overbuild in an individual market. That can have a negative impact on groups that are there already.

GlobeSt.com: In which geographical areas of the US are these investors concentrating their capital?

Black: Any top MSA. Each market has its own set of variables analyzed on a standalone basis. Whatever market a particular developer or buyer would consider entering into, choice #1 would be in the top 25 major metros—those are always in high demand. Again, secondary markets are also attractive on a national basis as long as the demographics support the need for care.

McNee: They'll really evaluate each of those markets and look at four parameters: barriers to entry, the financial capacity of the seniors, where the adult children live and supply of labor. From that point, the major metros are desirable, and they also look at the current supply of units.

GlobeSt.com: How do senior-housing/care investors view the sector for the long term?

McNee: Senior-housing investors are really bullish; everybody is excited about the future of the industry, and capital is abundant for existing communities as well as ground-up development. People haven't taken their foot off the gas. The last part of last year and the first part of this year have been strong as well for senior housing and senior care.

GlobeSt.com: What else should our readers know about this sector?

Black: The full impact of the Baby-Boomer generation has yet to hit the sector. The average age of a resident in assisted living is in mid-80s, whereas a decade ago, it was lower. This is a needs-based industry, and there will always be demand.

McNee: The entire market of institutional-quality assets is less than 24,000 communities, including independent living, assisted living, memory care and skilled nursing. In fact, the senior housing sector, excluding skilled nursing, only consists of about 12,500 communities; that's quite a deficiency if you consider the number of seniors coming on line over next few years. But it really is market dependent, when looking at current supply metrics. Seniors want to be near their adult children and vice versa, so that's a key demographic on which to focus, and this is different from other product types in any given market.

We spoke with Black and McNee about the issues investors have regarding senior-housing and senior-care properties today.

GlobeSt.com: What are senior-housing & care investors most concerned about these days?

GlobeSt.com: In which geographical areas of the US are these investors concentrating their capital?

GlobeSt.com: How do senior-housing/care investors view the sector for the long term?

GlobeSt.com: What else should our readers know about this sector?

Instant Insights /

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