Healthcare real estate is thriving, leading to incredible consolidation. (Just as senior citizens shrink, so does the number of companies giving them a home.) We checked in with Institutional Property Advisors executive director and senior housing whiz Mark Myers for the latest.

The top story of the moment is massive consolidation, like the merger of Brookdale Senior Living and Emeritus Corp (there are well over 1,000 senior living facilities between the two companies). This demonstrates larger firms’ voracious appetites to grow, and may speak to further consolidation amongst REITs. Sometimes, the larger fish swallow up the smaller ones, and sometimes it’s the other way around, he says. (Like American Realty Capital Healthcare Trust’s plan to buy Griffin-American Healthcare REIT II for a reported $3.7B, tripling the size of ARC.) If long-term interest rates remain low (the 10-year Treasury is down to 2.59% from 2.73% and GSE loans range from mid-3%’s to mid-4%’s), they’ll only fuel the acquisition binge, Mark adds.

Nursing home spreads are still 300 bps to 400 bps above assisted living, with 11% to 12% cap rates that are appealing to eager investors. On the development front, the Chicago area is seeing quite a bit of activity from national players. For example, Mather LifeWays is prepaing for the $6.5M renovation and $17M expansion of its senior rental community, Mather Place of Wilmette, slated to begin in late spring (with expansion slated for early 2015). The LaSalle Group’s Autumn Leaves memory care facilities continue to pop up all over the MSA. A couple years ago, Pennsylvania-based Kendal Corp developed The Admiral, a $200M, 31-story North Side retirement high-rise (above), and the list keeps growing, Mark tells us.

There will always be overbuilding worries in any large market like Chicago, Denver, or LA, but more urgent industry issues concern reimbursements, Mark says. People on the long-term care side are facing managed care and Resource Utilization Groups (RUGs) based reimbursement systems, which tend to produce wider swings of losers and winners, depending on a provider’s ability to adapt to the complex networks and health delivery systems. Nursing home reimbursement through Medicaid is based on rehab intensity, and as a result of that people are joining forces with Accountable Care Organizations (ACOs) and managed care companies to create contract relationships with hospitals and health systems. (There’s always power in numbers, unless somebody’s contagious.) Outside of the office, Mark enjoys waterskiing and swimming with his kids at his family’s Michigan lake house.