We’re In the Golden Era of Senior Housing Investments

Institutional and personal investors seeking lucrative opportunities in the real estate market should take note: the senior housing sector is experiencing a golden era for investment. At Birchwood Healthcare Partners, we are excited about our 5V+ Seniors Healthcare Fund, which is strategically positioned to capitalize on these opportunities, offering investors the potential for significant value creation. 

Current Market Dynamics 

A Favorable Buying Opportunity 

The pre-pandemic era saw investors overlooking supply and demand fundamentals, resulting in excessive leverage. However, post-pandemic inflation and historical interest rate hikes have caused banks to pull back on real estate lending, creating downward pressure on property values. Additionally, the cessation of $272 billion in pandemic-era governmental subsidies and pandemic-related “stay-at-home” orders have further strained the market, presenting a favorable buying opportunity for investors. 

Strong Market Demand for Senior Housing 

Despite challenges, the senior housing market is experiencing strong demand. Occupancy has increased for ten consecutive quarters, rising from a pandemic low of 77.8% in 2021 to 83.7%. However, there is still room for growth, as occupancy needs time to surpass the pre-pandemic level of 87.1% in 2019. Additionally, units under construction have decreased to 4.9% of total existing senior housing inventory, marking the lowest level since 2014. 

Future Cap Rate Compression 

U.S. real estate assets under management (AUM) grew to almost $1 trillion in 2022, with over $28.4 billion in dry powder. This significant increase in AUM, compared to $390 billion and $618 billion at the end of 2013 and 2010, respectively, indicates substantial equity ready to flow back into the market. As a result, property values are expected to rise, leading to cap rate compression. 

A Golden Opportunity for Investors 

“The senior housing market is experiencing a golden era for investment, and our 5V+ Fund is strategically positioned to capitalize on these opportunities, offering investors the potential for significant value creation,” says Isaac Dole, CEO of Birchwood Healthcare Partners. 

At Birchwood Healthcare Partner, our 5V+ Fund focuses on acquiring assets at a low basis, driving occupancy and revenue, and strategically repositioning and selling assets. With a long-term investment horizon of 5–10 years, the 5V+ Fund is designed to maximize returns for investors. 

For more information on how to invest with Birchwood Healthcare Partners, visit birchwoodhcp.com or contact us directly. 

Isaac Dole

Isaac Dole

CEO of Birchwood Healthcare Partners

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