Seniors Housing on the Rise

Like grandpa's ear hair, seniors housing is growing. It's one of the few CRE asset classes that is, ARA National Seniors Housing Group's Scott Corbin tells us. Compared with '09, sales volume has spiked (like Grandpa's blood pressure after glimpsing Betty Grable's gams). ARA's Ryan Maconachy (right, with Scott) anticipates more development this year as banks are loosening: “We're seeing some initial fundings and groundbreakings." They've also seen cap rates stabilize with a significant drop over last 120 days. (Cap rates dropped significantly in Q1 but he predicts even more in Q2.) REITs have come back into play in a big way and are ready to spend money again, causing private equity groups to resume as well.
From 4Q'09 to 1Q10, Ryan notes that four of the most active seniors living development markets are ChicagoNew Yor kDallas, and Houston. (All markets Bisnow covers. Coincidence?) DFW leads the pack with 1,494 total units, followed by the Windy City with 1,302 under construction (689 independent living, 321 assisted living, and 292 skilled nursing facilities). The Big Apple is next with 1,056 units (831 IL, 120 AL and 105 SNF), while Houston rounds out the leaders with 591 units under construction (see chart).

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