Senior housing total investment return rises again in Q3: NIC

According to a blog post by the National Investment Center for Seniors Housing & Care, the senior housing sector has seen its ninth consecutive quarter of growth in total return on investment since the second quarter of return on investment, or the investor’s actual returnt The senior housing sector was +0.59% in Q3-2022.

“The short-term total return of senior housing is comparable to that of general housing. [National Council of Real Estate Investment Fiduciaries National Property Index]NIC Chief Economist and Outreach Director Beth Burnham Mace and NIC Senior Principal Caroline Clapp said in the post: “Positive income returns for both NPI and senior housing were partially offset by negative valuations, reducing overall investment returns.”

Senior housing returned 0.83% in the first quarter, ahead of industrial property’s 0.76%, according to experts. However, the return on senior housing was lower than the overall NPI at 0.93%. Valuation (Capital/Valuation) return for the first quarter was -0.24%, the fourth consecutive quarter of increase. Mace and Clapp say current economic and capital market returns are hurting upside returns.

“Additionally, many investors are lowering expectations for senior housing as the impact of coronavirus weighs on their view of the sector. It’s a change in value,” they said.

Looking back over the past 10 years, the rate of return on senior housing has been high, with a gross rate of return of 10.14%. This compares to an NPI of 9.48%. Elderly housing income returns (5.30%) outperformed his NPI (4.73%), as did valuation returns (4.67%).

The performance measure cited for senior housing reflects revenues from 189 senior housing valued at $10.62 billion in the third quarter. This is the highest number of properties and market value in his NCREIF time series for senior housing, NIC said.

“It is also worth noting that the number of properties tracked by this index has increased significantly since the start of the pandemic. There were 134 properties in the first quarter of 2020, valued at $6.3 billion. Additional properties can impact the overall performance return of an index,” Mace and Clapp said.

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