When you discover this article is about NIC you may be tempted to skip the read, but you shouldn’t.
What happens in the Senior Housing Capital Markets says a lot about the health of the industry today and provides insights into the future holds.
For a variety of reasons, I missed the National Investment Center (NIC) National Conference that took place in Chicago last week. I read a number of reports that all pretty much addressed the presentations. I wanted another perspective so over the last week I conducted a bunch of short interviews with attendees (the list below) to get a read on what they got from the conference.
When you discover this article is about NIC you may be tempted to skip the read, but you shouldn’t. What happens in the Senior Housing Capital Markets says a lot about the health of the industry today and provides insights into the future holds. For a variety of reasons, I missed the National Investment Center (NIC) National Conference that took place in Chicago last week. I read a number of reports that all pretty much addressed the presentations. I wanted another perspective so over the last week I conducted a bunch of short interviews with attendees (the list below) to get a read on what they got from the conference.
NIC has been accurately described as the number one networking event of the year for senior living executives and senior living capital providers. More than one person equated it speed dating. Both developers and capital providers moved quickly from one meeting to the next. It was particularly interesting that one executive I talked to said they did not attend a single educational session and several others said they attended only a few. sources. These dates fall into two categories, working on deals with existing money people and creating new relationships. Several attendees said they came away with more potential transactions than they had capacity to complete allowing them to be selective.
Was was particularly striking, was how positive every single attendee was. Over and over I heard words like “jubilant”, “optimistic”, “vibrant”. The only complaint, if you can call it a complaint at all, I heard was that participants have enough time to meet with everyone they wanted to meet.
While a lot of the leaders I talked with attended only a limited number of sessions, the feedback was universally positive. Several mentioned the session on ACO’s and memory care. They were both useful and practical.
Availability of Funds
There were several points I heard over and over again.
- There were more funding sources available to talk with, both equity and debt.
- There were funding sources beyond HUD.
- There were new players who had money to invest
- Some of those with money were looking for distressed properties or notes that were in default because of the potential to improve their returns.
- From one smaller, but established operator there is more funding available for smaller players.
- If a developer or operator was looking for equity partners, there were opportunities; If they were looking for debt funding, it was available.
- More than anything else, those with capital were looking for operators who have a successful track record. This was more important than the specific market area or anything else.
- It was a huge benefit to get a better understanding of the cost of capital.
The reasons for attending were varied. Some were looking to get educated. Others were looking for capital and still others were looking to take an ownership position. (If there was a segment I missed in my interviews, it was with suppliers of capital) The most amazing thing about the conference was that regardless of motivation everyone seemed to find what they were looking for.
- NIC provides a nice contrast/compliment to ALFA, meaning that ALFA is mostly focused on community level operational and marketing concerns and NIC is focused on finance, development and a higher level view of the industry.
- Highest attendance
- Lots of new people: Maybe as many as 30% new people. More equity partners, developers who are significant players outside senior housing but new to senior housing.
- The equity providers seemed “distracted” from new development deals preferring distressed properties or notes in default.
- Those who went looking for deals or opportunities found an abundance allowing them to “cherry-pick” the best of them.
- Those who were new to NIC and more importantly new to senior housing, continued to find capital a challenge unless they partnered with experienced successful opportunities.
A huge thanks to those who helped me with this story:
Aaron Koelsch, President/CEO Koelsch Senior Communities
Adam Benton, Stellar Senior Living, LLC.
Chris Coates, Evergreen Senior Living Cory File, Managing Partner Kingston Bay Senior Living
Gary White, Good Neighbor Care
Leon Grundstein, President GenCare
Lee Field, CEO Senior Services of America
Loren, Shook, President, CEO Silverado Senior Living
Marc Thompson, Thompson Advisors
Paul Mullin, VP of Development Silverado Senior Living
Ryan Weissmueller, COO & CFO Solterra Senior Living
Were you there? Do you have anything you would like add . . . or dispute? Steve Moran