Seasoned Asset Class

Like Grandpa's ear hair, seniors housing is growing—and it's one of the few asset classes that is, ARA National Seniors Housing Group's Scott Corbin (left, with Ryan Maconachy) tells us. Compared with last year, sales volume has spiked (sort of like Grandpa's blood pressure after glimpsing Betty Grable'sgams). Ryan adds that ARA anticipates more development this year as banks loosen up; there's already some initial fundings and groundbreakings. Other trends:caps rates have stabilized, with a significant drop in the last 120 days; REITS haves come back into play in a big way, followed by private equity groups; and lenders have gotten so conservative on the construction side that only the best deals are getting through.
When examining the National Market Overviews from 4Q09 to 1Q10, Ryan notes that NYC is one of the most active senior living development markets, which includes Chicago, Dallas, and Houston. Dallas-Fort Worth leads the pack with 1,494 total units, followed by the Windy City with 1,302 total units under construction (689 independent living, 321 assisted living, and 292 skilled nursing facilities). The Big Apple is next with 1,056 units under construction (831 IL, 120 AL and 105 SNF), while Houston rounds out the leaders with 591 total units under construction.

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