Acquisitions are likely to be a key growth strategy for the senior
housing and care industry next year, according to a survey of executives
in the field released today by GE Capital, Healthcare Financial
Services. Overall, they’re expecting stronger business performance in
the next 12 months, despite concerns about rising interest rates and
regulatory oversight.
Two-thirds (67 percent) of survey respondents said their primary
strategy for growth in the next year is to buy or merge with existing
properties or operators. Nearly one-quarter (26 percent) said they plan
to revitalize and upgrade existing properties.
As a result, over one-half (51 percent) said funds for acquisitions will
be the most important type of financing they seek. Thirty-one percent
said they were likely to seek construction financing.
“This survey echoes what we’re seeing in our business, which thus far
has provided nearly $2 billion in financing commitments in 2014,” said
James Seymour, senior managing director of GE Capital, Healthcare
Financial Services’ real estate financing team. “Spurred by changes in
the post-acute environment and improving industry fundamentals, U.S.
senior housing and care investors and providers are aggressively
pursuing a variety of expansion strategies.”
Additional Survey Results
When asked their opinions on the industry’s greatest challenge in the
next 12 months, 26 percent selected rising interest rates and 22 percent
selected regulatory oversight. The U.S. economy was cited by 19 percent
of respondents and reimbursement pressures by 17 percent.
In 2013, respondents viewed the challenges facing the industry quite
differently. At that time, the U.S. economy (35 percent) and
reimbursement pressures (29 percent) were seen as their top two
challenges.
Industry executives overwhelmingly (76 percent) expect the performance
of their business to be stronger in the next 12 months, nearly flat from
last year’s results (77 percent).
Property and business valuations in the senior housing and care sector
are seen as being sustainable based on a better market understanding of
the space (31 percent) or improving industry fundamentals (25 percent).
Nevertheless, 23 percent said the valuations are not sustainable.
One hundred fifty executives within the senior housing and care industry
took the GE Capital survey, which was conducted via email in September.
About GE Capital, Healthcare Financial Services
GE Capital’s Healthcare Financial Services (HFS) business is one of the
most active capital providers in the U.S. healthcare market, deploying
approximately $9 billion in new commitments to customers via 200+
transactions in 2013. That adds up to more than $70 billion in financing
over the past 10 years.
Customers across 45 healthcare sectors — including senior housing,
hospitals, medical offices, outpatient services, pharmaceuticals and
medical devices — rely on HFS to finance acquisitions, refinance
existing debt, support working capital needs and fund growth
initiatives. With in-depth industry knowledge and expertise, the HFS
team of professionals creates financial solutions tailored to meet the
individual needs of its customers. For more information, visit
gecapital.com/healthcare or follow company news via Twitter (http://twitter.com/GELendLease).
GE Capital offers consumers and businesses around the globe an array of
financial products and services. For more information, visit www.gecapital.com
or follow company news via Twitter (http://twitter.com/GECapital).
GE (NYSE: GE) works on things that matter. The best people and the best
technologies taking on the toughest challenges. Finding solutions in
energy, health and home, transportation and finance. Building, powering,
moving and curing the world. Not just imagining. Doing. GE works. For
more information, visit the company's website at www.ge.com.
Copyright Business Wire 2014