We believe growing demand and supply drivers, as well as favorable sector performance, make investing in seniors housing an excellent way to provide diversity and income to portfolios.
WHY SENIORS HOUSING?
The number of people in the United States over the age of 65 is projected to increase more than 70 percent by 2030, from about 14.9 percent to 20.6 percent of the total population. Additionally, in the next few years, for the first time in human history, people aged 65 and older will outnumber children under the age of five. By 2050, the percentage of people over age 65 will be more than double that of children under age five.1
65+ Population Growth
|Source: U.S. Census Bureau, 2014 National Population Projections, Projections of the Population by Sex and Age for the United States: 2015 to 2060|
Healthcare Spending By Age 2014
Typically, as people age, they utilize and spend more on healthcare. This is especially true for those 65 and older who develop chronic conditions requiring long-term, specialty services and housing such as assisted living, skilled nursing, and memory care. Currently, more than 5 million Americans have been diagnosed with Alzheimer’s; by 2050 that number could reach almost 14 million.2
|Source: Bureau of Labor Statistics consumer spending survey, third quarter of 2013-second quarter 2014.|
Favorable Sector Performance
Institutional-quality, private-pay seniors housing returns have outperformed other commercial real estate property types over the 10-year period from 2007 through 2017, even during periods of economic recession. During this time, seniors housing also outperformed its commercial real estate counterparts in terms of appreciation, income and relatively steady leasing trends.3
NCREIF Annualized Total Returns Across Select Property Types
As of 3/31/17. National Council of Real Estate Investment Fiduciaries, Real Estate Performance Report, First Quarter 2017.
Triloma’s team has extensive experience in seniors housing investments. Triloma and its principals approved and structured private offerings for six seniors housing development projects with a total capitalization of over $120 million. Additionally, the leadership team has raised more than $2.5 billion in seniors housing investment offerings throughout their careers.
Triloma’s disciplined approach to seniors housing investment calls for rigorous analysis of market supply/demand trends to ensure our investments are supported by strong local market fundamentals. With this operating discipline, we can acquire or develop communities across various economic cycles, according to market need.
Our chief investment officer, James Hendrix, has more than 14 years experience in seniors housing and healthcare investments and has been involved in the acquisition of over $2 billion in seniors housing assets. Triloma is an active investor in the seniors housing sector, and is always looking for new investment opportunities.
For more information, or to speak to James Hendrix about acquisition opportunities, please call Triloma at 888-773-3526.
The acquisition and development of seniors housing communities is subject to risks associated with real estate assets, including but not limited to inflation, changes in the general economic climate, local conditions such as oversupply of or a reduction in demand for seniors housing space, the attractiveness of the developed communities to potential tenants, competition from other seniors housing communities, compliance with regulations, and the potential for liability under applicable laws or as a result of operations. There can be no assurance that the seniors housing industry will not experience adverse economic conditions.
1U.S. Census Bureau, 2014 National Population Projections, Projections of the Population by Sex and Age for the United States: 2015 to 2060.
2Alzheimer’s Association, 2017 Alzheimer Disease Facts and Figures.
3National Investment Center, NIC Investment Guide: Investing in Seniors Housing & Care Properties (fourth edition), 2016.