Why Senior Housing?
Baby Boomers first started turning 65 in 2011, and Baby Boomers are now turning 65 at a rate of more than 10,000 per day. The population aged 65+ is forecasted to grow at an annual rate of 2.9% over the next five years. A good way to put this “Graying of America” into perspective is the following: A 6.2% increase in the number of seniors is more than the total number of the entire existing supply of professionally managed Senior Housing units. To combat this increasing demand, developers from all backgrounds have increased new construction to highs that haven’t been seen since the late 90’s. Despite this increase in construction, occupancy and rent growth have increased since the recession. Additionally, the total return of senior housing from 2007 to 2014 (Great Recession) was 10.2%, which is double that of any other major real estate asset type.
Thrive’s Senior Living program focuses on assets that have high upside potential. These senior living properties each have stories as unique and varied as the residents who occupy them. Specifically, we target newly built assets below replacement cost with the following criteria:
- Operational inefficiencies
- Management/occupancy challenges
- Unrealized gains through incremental income streams
These assets can either present value-add or Core + acquisition opportunities in markets that exhibit good fundamentals. We partner with best-of-class managers and operators who have specialties and expertise in those markets.
Investors with a higher tolerance for volatility find senior living investments attractive, as these properties typically generate higher returns. Thrive Senior Living assets usually have assisted living and memory care components, possibly offering independent living units as well.
Anticipated hold periods for senior living assets are shorter than most Multifamily investments, with a target hold of 1-4 years. However, because of potentially higher growth and appreciation, targeted overall returns are slightly higher than our Multifamily investments at 14%-22% annually.