Prior to the pandemic, investment demand was high for the so-called “value-add” properties, with the potential for much higher returns than for “A” properties. With crashing occupancy all around, did this dynamic change, and will the disparity between “A” and “B” values grow wider post pandemic?
The COVID-19 pandemic hit the seniors housing industry hard, and while no community was immune from the difficulties, there are probably going to be winners and, unfortunately, losers coming out of this. Lower acuity communities appear to have performed better in the last year, and properties with strong existing census had a leg up going into the pandemic. But in 2020, buyers seemed to have valued quality the most, with “A” properties actually selling at a premium year over year and “B” properties more steeply discounted.
These two markets have increasingly diverged in the last several years for a variety of reasons, but will the gap continue to grow after the pandemic? Occupancy dropped at communities of all qualities, and consumer preferences (or what they want to pay for seniors housing services) may have altered forever. So how will investors of either property type have to react, and importantly, where will prices and cap rates go? On Thursday April 22, I am moderating a webinar that will comprehensively cover this important topic. We’ll go over the stats, the strategies and, of course, all of your questions.
