Multi-Housing News talked to the CEO of an apartment REIT. I noticed a couple things relevant to senior living:
"Jay" Olander says that his Grubb & Ellis Apartment REIT is buying properties in the American South, following population movements and anticipating more than 90 million additional people in the U.S. by 2030. [So I'm paying attention to the future of the CCRC industry in the South.] He is avoiding Arizona, Las Vegas, and Florida where there was significant over-building of single family homes and condos.
He also spoke about 'fractured condo deals' - where a single investor purchases a number of units in a condo development in order to run a rental housing operation.
If you have a large mass of units, fractured condos may make a lot of sense. Any time there’s a mixed ownership, that means there’s a mixed contribution to the common elements. So it just depends on how much you control... you have to control a lot of the property to be able to control the common area elements, to be sure it’s well-maintained.In the right location and given sufficient local demand for continuing care retirement living, could distressed condos be an economical way for a successful CCRC operator to acquire a new campus at a substantial discount? There would, of course, be major renovation costs to renovate to make the property suitable for its new use.