The Seniors Housing Lending Environment:
A Discussion with Beth Mace
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In the latest in a series of dialogues with key players regarding the current lending environment in
the seniors housing and care industry, Michael Hargrave, vice president - NIC MAP®, recently interviewed
Beth Mace, director-AEW Research, AEW Capital Management, L.P.
Recently you published an article in NCREIF's quarterly newsletter (NCREIF is the acronym for
National Council for Real Estate Investment Fiduciaries. The article (attached) highlights the performance
of seniors housing properties in the NCREIF database compared to other property types.) Can you walk
us through the steps that were taken to include these properties in the NCREIF database? What is the importance
of including seniors housing properties in the NCREIF database?
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Ms. Mace: As background, NCREIF is a non-profit organization that publishes commercial
property returns with a goal of "increasing the understanding of, and lending credibility to real estate
as an institutional investment asset class." The organization produces the often-cited NCREIF Property
Index (NPI), which is a historical measurement of property-level returns for industrial, office, multi-family
and retail properties. The database is comprised of operating properties acquired, at least in part,
on behalf of tax-exempt institutions and held in a fiduciary environment. Since 2002, NCREIF has been
collecting return data on the seniors housing sector. The data currently resides in NCREIF's "other category"
and is not part of the NPI index. For NCREIF purposes, seniors housing does not include traditional institutional
"nursing home" facilities. As of the third quarter 2009, 13 managers reported data on 66 stabilized
seniors housing properties to NCREIF. The value of these assets totaled $2.355 billion. In general, these
managers oversee more than just seniors housing properties and report quarterly data into NCREIF on all
of their assets under management, which includes seniors housing.
It's important that the seniors housing sector is valued in the same way as other institutional real
estate in order to compare relative return performance. This is especially important for institutional
investors who often make sector allocation decisions based on return characteristics. Additional investor
interest and capital is likely to emerge by including seniors housing in the universe of properties tracked
by NCREIF as familiarity with the sector increases.
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Can you summarize the highlights with regard to the performance of seniors housing properties
in the NCREIF database?
Ms. Mace: Since inception, returns for the seniors housing properties in the NCREIF
database have outperformed the overall NPI index and the apartment component of the NPI. As of the third
quarter of 2009, the seniors housing category had generated a cumulative return that was 2.3 times its
mid-2003 value. This compares with a cumulative gain of 1.4 for the apartment index and 1.5 for the
entire index. The outperformance stems from greater gains in both the appreciation component (1.4 versus
1.0 and 1.1, respectively) and the income component (1.6 versus 1.4 and 1.5, respectively).
3. With 13 managers reporting on 66 properties, there is a need for a greater number of properties
to be included in the database. What can we do to help this effort?
Ms. Mace: I encourage managers of seniors housing to contribute their data to NCREIF.
The analysis I did was based on a fairly small sample size and it would be helpful to have a broader
array of properties to be able to examine return parameters by property type to geographic location.
For more information on how to become a data contributing member, go to
http://www.ncreif.com/apply.aspx
or
CLICK HERE
to download a PDF version of the NCREIF Membership Brochure.
CLICK HERE
for a PDF copy of the article.
Look for an interview with Vincent M. Cozzi, managing director, Ventas Healthcare Properties, in the March 2010 edition of the NIC Insider.
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Seniors Housing & Care
Industry Calendar
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| February 2010: |
| 17-19 | AHLA Long Term Care and the Law Conference - Miami, FL |
| 22-24 | AAHSA Future of Aging Services Conference and Leadership Summit - Washington, DC |
| March 2010: |
| 2 | Access to Nature Webinar: The Value of Nature for Older Adults - 1:00 p.m. EST
led by Susan Rodiek, Ph.D., Professor in Health Facilities Design, the College of Architecture, Texas A&M University
sponsored by the Pioneer Network |
| 8 | NIC Conference Planning Committee Meeting, San Diego, CA |
| 8-10 | NIC National Skilled Nursing Investment Forum, Hilton, San Diego, CA |
| 9 | NIC Executive Committee Meeting, San Diego, CA |
| 9 | Access to Nature Webinar: Improving Outdoor Access for Older Adults - 1:00 p.m. EST
led by Susan Rodiek, Ph.D., Professor in Health Facilities Design, the College of Architecture, Texas A&M University
sponsored by the Pioneer Network |
| 9-11 | NIC Regional Symposium, Hilton, San Diego, CA |
| 11-12 | AHCA/NCAL Independent Owner Conference - Scottsdale, AZ |
| 16 | Access to Nature Webinar: Safe and Usable Outdoor Spaces for Older Adults - 1:00 p.m. EST
led by Susan Rodiek, Ph.D., Professor in Health Facilities Design, the College of Architecture, Texas A&M University
sponsored by the Pioneer Network |
| 24-25 | PREA Spring Conference, The InterContinental Boston, Boston, MA |
| April 2010: |
| 14-16 | Joint NIC/ ASHA Spring Meetings, Dallas, TX |
| 21-23 | AHCA/NCAL Spring Multifacility Conference for CEOs and Senior Executive Leaders - Clearwater Beach, FL |
| May 2010: |
| 1-4 | LTC 100 Conference, Key Biscayne, FL |
| 25-27 | ALFA Annual Conference & Expo, Phoenix, AZ |
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