MJM holds the following outlook for the seniors housing industry:
- Demand now again exceeds supply and the demographic engine behind the industry remains compelling and unstoppable. In addition, the investment community understands the industry much better than it did in the late 1990’s and is not likely to drive the industry to get ahead of itself again.
- The understanding and acceptance on the part of the public of the products offered has been growing exponentially over the last decade.
- The art and science of seniors housing management is continuing to be perfected, and the likelihood that well run, well designed facilities operating in strong markets will stay stabilized is very high.
- Portfolios of properties in geographic clusters create management efficiencies that result in superior performance as well as natural protection against a problem that might develop with any single property.
- While cap values on stabilized portfolios have dropped below 8%, they still remain higher than other core real estate classes, and yet they can offer greater yield and less risk with room for asset appreciation.