Our population is aging. It's that simple. And demand for seniors housing (and lukewarm tea) has gone gangbusters. That’s why we're thrilled to hold Bisnow’s Seniors Housing Summit next week, where top-notch speakers will discuss how the look and services of these properties are changing.
Marcus & Millichap’s Rod Llanos tells us we’re in quite the seniors housing construction boom—there were about 20 development or expansion announcements in the last 18 months. Given there are only about 240 seniors housing and skilled nursing facilities in our metro, that’s big. But don’t worry about overbuilding, he says—developers have been doing better feasibility studies. Nationwide, all sectors of the seniors housing market are building momentum for the first time in years.
Rod says lots of new capital is eying seniors housing for the first time, partially driven by cap rate compression in other property types. In Texas, senior housing has 7% to 10% cap rates for assisted living and 12% to 15% caps for skilled nursing. (In terms of shower caps, that's all seniors.) Houston is on the low end of that spectrum. Plus, we’ve been maintaining 2.3% rent growth across the sector—last year we topped 3% in independent living, one of the best in the country—and about 89% occupancy.
Rod and Doug O'Toole recently closed the sale of Fort Bend Healthcare Center, a 56-bed property listed at $3.8M (a very high price per bed and per SF). He tells us there was a lot of interest in it because of its location (Fort Bend is such a high-growth market) and solid operations—despite being smaller and older (built in the ‘60s). The property was well maintained with a solid cash flow, and it was voted the best nursing facility in the county last year in the Fort Bend Herald's Readers' Choice Awards. Besides its age, it has extra land around it, so Rod says the new owner could do an addition to the facility down the road. Learn more at our Seniors Housing summit on Tuesday, July 22.
)
)
)
)
)
)
)
)
)
)
)
)