Falling prices have created unique opportunities in Senior Housing for investors able to seize the moment and capitalize on the financial difficulties some commercial property owners are currently experiencing.

While occupancy rates nationally are relatively stable, senior housing property owners who are suffering through the one-two punch of being unable to refinance and being unable to generate enough gross revenue to handle their overhead expenses, including mortgage payments, are left with the difficult decision to sell or face the possibility of foreclosure or bankruptcy.

While this is a difficult decision for owners such as Sunwest Management of Salem, OR, it has created a buying bonanza for others, like Five Star Quality Care.  Timing is everything in any market - and in this case it was a case of "what goes around comes around."  Just two years ago, Sunwest outbid Five Star for a senior housing development that both firms were hoping to acquire.

One of the opportunities that well-capitalized investors have is to purchase Senior Housing properties for thousands of dollars less per unit than they would have been forced to pay in better market conditions.  By buying low, they could then garner more interest from potential renters by offering the properties at a lower rent rate.  Then, when the market improves, it would be relatively simple to increase rents to increase the value of the property.

The short-term benefit to commercial real estate investors employing this strategy would be higher occupancy rates and net profits.  However, in the long run, rental rates in Senior Housing are expected to rise once again.  When this occurs, investors who have acquired some of these properties can expect to see lucrative profit opportunities.

While funding is certainly more difficult to obtain in today's market, investors who can take advantage of these opportunities can expect to see double-digit annual returns.  Financing costs are lower, which translates to higher profits - larger returns - for those ready and able to reap the financial rewards.

Many REIT's (Real Estate Investment Trusts) are heavily invested in the Senior Housing market.  As they begin to experience financial problems brought on by current market conditions and an inability to refinance, they will be looking to dispose some of these problem properties in an effort to remain solvent and ride through the financial storm.

This will present investors who are ready and able to capitalize on the misfortunes of others with the unbridled opportunity to reap some of the many rewards available in the potentially lucrative Senior Housing market.

The key to capitalizing on these opportunities is having access to capital and having an effective strategy for turning profit potential into profit realized.  In order to do that, one needs only to take the first step: lining up the acquisition capital necessary to begin purchasing Senior Housing units at historically low prices.

An experienced, full service commercial real estate solutions firm experienced in the Senior Housing market can handle many of the details so critical to the success of a property acquisition, and can help a commercial real estate investor tap into revenue sources that can facilitate the success of the coming boom in Senior Housing.  

For more information contact:
Irving J. Diaz, Senior Managing Director for SouthOne Capital, LLC.
www.southonecapital.com | (888) 800-3126