The pool of investors looking to bet on U.S. demographic trends continues to grow, recent fundraising from Kayne Anderson Real Estate reveals.
The private investment firm has reportedly pulled in $2.5B in an ongoing fundraising effort that will be used to buy into needs-based sectors including senior housing, medical offices and student housing.
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The cash flowing into Kayne Anderson Real Estate Partners Fund VII puts it on track to hit the $3B target announced when the fund was launched last August. Other commitments from investors put the total closer to the fund’s $4B cap, according to PERE News, which first reported the fundraising details.
Kayne Anderson's real estate investment platform has historically focused on alternative real estate, with a strategy based on demographic trends that targets sectors that are historically resilient during economic downturns.
The investment firm has “high conviction” in the senior living space, Vice President of Marketing and Investor Relations Isaiah Moriarity told Senior Housing News after the interest in the fund was first reported in November.
Kayne Anderson, which has offices in Chicago, New York, Florida, Texas and London, declined Bisnow’s request for confirmation or comment Monday morning. Moriarity declined to comment to Senior Housing News about the fundraising details.
In October, the investment firm also announced a partnership with Chicago-based Remedy Medical Properties to buy into a 96%-occupied portfolio of 296 medical office buildings in 34 states. The joint venture is buying the properties from Welltower in phases for a combined $6B, with a $2B portion of the deal closing in October.
Welltower is selling the office properties as part of strategic pivot to focus solely on senior housing.
Investors have flocked to properties that serve the aging U.S. population, especially senior housing, as more baby boomers require some level of care. Demand for senior housing is expected to outpace supply by more than 300,000 units within the next five years, according to NIC MAP, a data provider in the sector.
Town Lane, a New York-based investment manager, hired a senior housing veteran to lead its newly launched value-add and opportunistic platform, the company announced Monday. The firm has raised more than $1B for senior housing acquisitions and has already purchased or is under contract to buy six properties.
Clarion Partners, an investment firm that manages some $73B in assets, purchased its first senior housing facility in its 40-year history in October and plans to spend $1B annually for the next several years building up a new portfolio.
But as dollars pour in, one investment giant is getting out of the market. Blackstone has been quietly selling its portfolio of around 9,000 units since 2022 in a series of one-off transactions that have led to $1.8B in losses.
Most of the properties were purchased as value-add opportunities that Blackstone had hoped to upgrade and flip, but its plan was snagged by a pandemic-era decrease in demand, followed by rising interest rates and wages eating into operating profits.
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