SENIORS HOUSING ROLLER COASTER
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|Moody's chief economist Mark Zandi offered good news and, you guessed it—bad news—at the National Investment Council's 20th annual conference in Chicago last week. Investors were happy to hear that the largest single-year age group is now 50-years-old, meaning potentially more profits for seniors housing, but disappointed that employment isn't growing quickly enough to sustain a continued drop in unemployment. And no, Mark isn't showing us the size of the fish he caught last weekend. He's explaining how small businesses account for about half of employment growth and two-thirds of business growth in the country, and currently they don't have enough money for capital improvements. As the stimulus package wears off and policy uncertainty increases, businesses will still be hesitant about hiring, he said during Thursday's breakfast at the Sheraton. Americans will be uncomfortable with economic growth for another six to 12 months, he predicts, until the employment spigot turns back on around August 2011.|
|At lunch, Newt Gingrich explained that the recent passage of the healthcare bill could be moot if legislators start trying to get parts of it line-item vetoed over the course of the next four years before it goes into effect, especially with an expected influx of Republicans in the legislature at the mid-term elections. He anticipates that in the future, efficiencies in healthcare overseas, such as the ability to get the same surgery for a fraction of the price, will cut into US healthcare profits.|
|We snapped some real live investors at the conference: Focus Healthcare Partners' Curt Schaller, Kensington Advisors' Jim Smith, and Philip Van Syckle. Curt's company recently bought the distressed debt on a property in Philadelphia, which he says has consistently had a good market for seniors housing, as well as a few busted condo projects. Kensington is still looking for the perfect deal, Jim says.|
|Pathways Senior Living's Aaron D'Costa and Quadrangle Partners'Aaron Osmundson were looking to start working together at the conference. Pathways is already under construction on a new seniors living facility in Vernon Hills.|