Houston's Seniors Housing Strength
Houston’s fundamentals are great, says Lancaster Pollard managing director for M&A in seniors housing Steve Graham. In Q1, construction jumped 17.4% year-over-year, and absorption rose 9.6%. We’re third in the country for new construction of continuing-care retirement communities and fourth in independent living. We’re also second for assisted living and freestanding memory care, which are the strongest seniors housing sectors today. Steve says those are especially rocking because there isn’t enough supply. The numbers make Steve so happy he could sing. (He likes to play the guitar—above. '70s music is his fave.)
Some examples: Caddis Partners is building two 78-unit (54 assisted living and 24 memory care) Heartis communities in Cypress (rendereding) and Clear Lake, opening in Q1 ’15. Bridgewood Property Co purchased two acres at 1015 S. Shepherd for a mid-rise community that will offer independent living, assisted living, and memory care units. The 183k SF facility (The Village of River Oaks) will open in spring ’16. Bridgewood also has The Village of The Heights (1407 Studewood) opening this fall. What’s not getting built: Nursing homes, largely because of the uncertainty with the reimbursement environment. Big changes in the last 24 months make the investment market a little anxious, Steve tells us.
Besides shrinking vacancies and steady fundamentals through the recession, investors and capital providers are drawn to seniors housing’s lower cost of capital. That’s driving a steady stream of M&A, Steve tells us. Locally, American Realty Capital purchased The Solana at Cinco Ranch, a 184-unit independent, assisted living, and memory care facility at 24001 Cinco Village Center Blvd. The purchase from Formation Development Group and affiliates of the Carlysle Group closed earlier this year for $71M. When he’s not financing deals, he dabbles in photography.