REIT sees growth opportunities ahead in senior housing

Bolstered demand, increased affordability and growing incomes bode well for the future, Cafaro noted: “Again – so we feel really good about the demand side. We feel good about affordability. We like the fact that seniors are starting to earn on their savings and get significant increases in their social security. And the product, again, is very affordable.”

Cafaro spoke about the current dynamic market in which the industry finds itself: “Well, we’re in a dynamic market across the board. And obviously, capital costs for public and private real estate companies are changing by the minute. And meanwhile, as we know from long decades of experience, cap rates take longer to adjust, right? And so our focus is really on picking our spots, where we – this Life Science University business – where we have a huge competitive advantage. We can buy cluster market life science, with our fund that has a lower cost of capital. That’s been a big success story as well.

“And then on senior housing, selective investments, we just acquired something at a six cap cash going in, with growth potential that still works. And then, of course, we’re finding ways to fund things through dispositions, through lower cost pockets of capital that make these transactions work.”

Bob Probst, chief financial officer, spoke about the role technology plays in the company’s decision-making, saying “…we have the opportunity to make big decisions that are data-driven, so that might be a decision to transition a community or triple that to shop transition to a new operator, sell something, buy something, invest CapEx or redev. We’re starting with the deep analytics. We’re driving the process, and then we’re bringing them to the manager and insights into it at the end of the process to decide where to create value.”