PHOENIX—As the population ages and lives longer, demand for post-acute-care services continues to change. Jack Dudick, managing director of Raymond James, a panelist at the recent RealShare National Healthcare Real Estate 2015 conference, said that capital is looking at investing in post-acute service space more than MOBs due to the additional yield they can find in the skilled nursing product type.
Dudick explained that the operators today for post acute care don't really view the real estate as an asset that needs to be on their balance sheet. And so, he said, this market is incredibly fragmented, maybe more than seniors housing.
"There is an incredible opportunity here in skilled nursing facilities where it is newer product, consumer driven and there are lots of development opportunities." He continued to point out that we should expect to see more consolidation on the operational side.
In terms of pricing in the post-acute service sector, Dudick said that in terms of other options, "if you have raised healthcare capital, it is attractive."
When moderator, John Mugford, editor of Healthcare Real Estate Insights, asked about who is selling these assets, Dudick said that he sees developers recapping assets. He added that "Plus or minus 71% are 'for-profit' operators."
For Peter Becronis, principal of Wembley Realty Advisors, post-acute care will be most of his business over the next few years.
And for Nate Goziak, VP of healthcare acquisitions at Carter Validus, who sees many opportunities and growth in the sector, the shift in space is quality over quantity, he said. "At the end of the day, you really have to understand those metrics and then you have to understand what the reimbursement risk is for each of the product types."
Goziak pointed out that it is a different paradigm, where, if you don't understand it on the front end, you will have a problem."Reimbursement risk is a factor outside of your control so you have to really understand the margins and understand the operating business. You can't look at them purely as a real estate transaction."
As for how Goziak got into post-acute? "It is a place we have found success creating those yields where the spread is a bit better for us than some of the traditional asset classes. We like the risk profile." Compared to MOB, he said, depending on the tenant credit, "we are seeing 50 to 75 basis points a spread over a traditional asset."
The 8th annual RealShare National Healthcare Real Estate 2015 event held Thursday at the Westin Kierland Resort & Spa in Scottsdale, AZ, drew more than 400 attendees. Check back with GlobeSt.com in the next day or so for more coverage from the event. The RealShare Conference Series is produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
