Recap of NIC Fall 2018

This year, the National Investment Center held its annual conference in Chicago from October 17th to 19th. The NIC, a non-profit organization, aims to support access and choice for American seniors by providing data, analytics and connections that bring together investors and providers in the senior housing industry.

The JCH Consulting Group attended NIC, as always, with great success. Our investment specialists held 30 meetings with operators and investors. It was an excellent time to meet with players of all types in the senior housing industry to discuss hot topics, rising concerns and share new information. 

A Bullish Outlook for the Senior Housing Industry in 2019

The senior housing industry has absolutely boomed in the past few years. The worries, for many, however, remain the same. Will an oversupply of construction diminish property values? Will certain senior housing investments flounder as they fail to perform to expectations? An increase in interest rates has hit some places hard and operators are still struggling to find good talent to staff their senior housing investments.

In spite of these issues, the senior housing industry remains bullish for the foreseeable future. In fact, investment specialists and industry veterans alike report that these concerns are all signs of an industry experiencing rapid growth. Certain aspects of the senior housing industry are growing faster than others. As inevitable pricing corrections take place, the entire industry is expected to stabilize.

In fact, as mentioned in the past, the American senior housing industry has attracted many international investors. At the NIC Bootcamp, a program specifically designed for first-time attendees, a significant number of guests were international players.

There was a particularly strong interest from Asian investors.  Many represented private equity firms and state-owned developers. For example, prior to the conference, news broke that Sino-Ocean, a Chinese real estate developer, acquired a 40 percent share in the American operating company Meridian Senior Living. While historically international partnerships have failed to flourish, traction has nonetheless been building.

The Senior Housing Industry Flushed with Debt and Equity

As debt rates rise, operators expect the senior housing industry to change in several ways.

Most obviously, rising interest rates raises cap rates and lower value. Consequently, expensive debt limits the amount a buyer can pay for any particular senior housing investment. It is unclear just how far and how long debt will rise. Fortunately, demand for assets within the senior housing industry is still high.

While eager or inexperienced investors continue to buy expensive or overvalued assets, industry veterans look forward to pricing corrections, especially for those holding onto existing assets and looking for growth.

Rapid growth does make the senior housing industry a tricky environment to navigate. With attraction to equity unlikely to diminish anytime soon, investors are encouraged to stay wary before committing to new senior housing investments. Too often people overpromise returns, causing negative reactions and in some instances, tarnishing the asset class or product type. Trust in senior housing investments that have sensible numbers with attainable returns.

Work with The JCH Group for Your Senior Housing Investments

The JCH Consulting Group works with hundreds of operators, investors and specialists to successfully navigate the senior housing industry. With well-researched and informed decisions, our team routinely builds strong and solid portfolios.

No matter the size or type of real estate asset, we are your top resource in making the most of your senior housing investments in the senior housing industry. By sticking to longstanding industry principles, our guidance in the sector has always weathered storms in the senior housing industry.

For expert guidance, work with the investment specialists at the JCH Group. Learn more about the senior housing industry and receive a free business valuation at your convenience.

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