Capital Markets on the Future of Seniors Housing in the United States Bob Kramer, CEO, NIC Beth Mace, Chief Economist, NIC Scott White, CEO, Mainstreet Health Investments
Federal Reserve’s Mandate: Full Employment, Moderate Inflation Unemployment Rate, Inflation Deflator and Fed Funds Rate 2007 – Q12017 12
6
10
5
8
4
6
3
4
2
2
1
0
0
Unemployment Rate (Left, %) Source: BLS, Commerce Department, Moody’s Analytics
Fed Funds Rate (Right, %)
Price Deflator (Left, %)
A Rising Interest Rate Environment? Yield Curve for U.S. Treasuries 2016 Q1– 2018 Q1 4.0 3.5 3.0
2.5 2.0 1.5 1.0 0.5 0.0 3-Month
6-Month
1-Year
2-Year
2016Q1 Source: Moody’s Analytics
3-Year
2017Q1
Maturity Schedule
5-Year
7-Year
2018Q1
10-Year
20-Year
30-Year
Seniors Housing Transaction Volumes Picked Up in 1Q 2017 Seniors Housing & Care Transactions Volume * U.S. | 1Q08 – 1Q17
Source: NIC MAP® Data Service, RCA
* Preliminary
Buyer Type Shifting as Public Buyers’ Share Continues to Fall Closed Transactions Seniors Housing & Care Volume by Buyer Type * U.S. | 1Q2008 – 1Q2017
Source: NIC MAP® Data Service, RCA
* Preliminary
Seniors Housing Pricing Rises Toward Recent Peak Seniors Housing & Care Transactions Rolling 4-Quarter Price Per Unit * U.S. | 1Q08 – 1Q17
Source: NIC MAP® Data Service, RCA
* Preliminary
Seniors Housing Occupancy Has Been Declining Seniors Housing Fundamentals Primary Markets | 1Q06-1Q17
Inventory Growth All Occupancy
Absorption Stabilized Occupancy
6000
94%
5000
92%
4000
90%
3000
88%
2000
86%
1000
84%
0
82%
-1000
80%
-2000
78% 2006
2007
Source: NIC MAP® Data Service
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Significant Inventory Growth in Some Markets Seniors Housing Annual Inventory Growth Primary & Secondary Markets | As of 1Q17
Source: NIC MAP® Data Service
Occupancy Performance Varies by Market Seniors Housing Occupancy by Metro Market Primary Markets | As of 1Q17
Occupancy Range (4Q05 - 1Q17) Current Quarter Occupancy Year Ago Occupancy
100%
95%
90%
85%
Source: NIC MAP® Data Service
SA
HOU
LV
RIV
DAL
ATL
CLE
KC
MIA
DEN
CHI
ORL
PHO
TAM
MAP3 1
MIN
PHI
CIN
SD
SEA
SF
BOS
PIT
STL
DET
POR
LA
NY
DC
SAC
BAL
75%
SJ
80%
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