Senior Housing as a Real Estate Investment

Senior Housing as a Real Estate Investment
After slumping from over building in the late 1990s and 2000, senior housing investing is now experiencing a popular resurgence. With combined average per-unit prices for assisted living and independent properties jumping nearly 70 percent in 2005—to a record $145,700 per unit according to the latest Senior Care Acquisition Report from Irving Levin Associates—investors are rushing into the senior housing real estate market at a torrid pace. This strong demand for properties has led to unprecedented market gains for senior housing investors as some $3.5 billion, and 24,000 units changed hands for 2005.

The senior housing industry is now about equal in size to the hospitality lodging industry in terms of net operating incomes and real estate market values. Capitalization rates have come down from their once double-digit rates but still remain attractive at between 7 and 9 percent compared with other real estate classes, and current industry occupancy is now at around 90 percent.

With the 85-year and older population estimated by the Census Bureau to grow three times that of the U.S. population as a whole this decade, we believe senior housing is a superior choice for any diversified real estate investment portfolio.

Potential Capital Size of Senior Housing Marketplace, 2005-2030-Private Pay Demand Only

"When looking at the seniors housing market as a whole, which includes Independent and Assisted Living facilities combined, the average price per unit paid in 2005 soared to $145,700, representing a nearly 70% increase from the previous year and a new record."

—Irving Levin Associates, Inc.
Senior Care Investor
March 2006

The information contained in this web site is for educational purposes only and should not be considered an offer to purchase or sell real estate or securities. Such offers are made only by a sponsor’s memorandum, which is always controlling. There are material risks associated with the ownership of real estate. For more complete information on the benefits and risks of an investment in real estate or tenant-in-common exchanges, including charges and expenses, consult the sponsor’s memorandum.

Christopher Place cannot and does not provide advice regarding specific tax consequences. Investors considering an IRC Section 1031 tax-deferred exchange should consult their accountant and/or attorney.