Right now, everyone is talking about the market for multifamily properties, but health care investments are clearly looking promising to a lot of commercial investment experts in 2011. While many analysts are predicting that the next wave of new construction and sales transactions will center largely around baby boomers as they make the transition from the homes where they have lived and raised their children to smaller homes, condos and even assisted- or senior living facilities, real estate investment trusts (REITs) like Health Care REIT Inc. are listening to the forecast and taking action. In fact, that particular REIT put a total of $3.2 billion into the healthcare industry and related properties[1]. The REIT reported that it made $77 million in asset sales in the final quarter of 2010.

Thanks to some serious setbacks faced by many baby boomers who have lost substantial parts of their retirement savings in the past few years, many senior living developers are changing their offerings and adjusting the scale of new development[2]. However, long-term demand trends remain strong, according to CEO of California’s Senior Resource Group, Michael Grust, whose company has responded to a “toughened construction financing climate” and a delay in purchase transactions and move-ins due to failure to sell currently-owned properties by scaling back on development, but not actually cancelling projects in the works. Although Grust’s company is currently building at about 50 percent of pre-crash levels, it has completed two new developments and operates 18 senior living communities at the time of publication.

The U.S. retirement community has improved over the past two years, with sales rising from $36.6 billion in 2008 to $37.9 billion in 2010. The industry has a projected growth of 2.6 percent in the next five years thanks to housing woes that are preventing seniors from selling when and for the amounts they want to and to a new trend in which parents are moving back in with children – at least temporarily – while economic issues are sorted out. Nevertheless, this is an industry with a “boom” coming in many people’s opinion as the baby boomers hit retirement age. Are you getting ready to take advantage of the growth potential in senior living properties?

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[1] http://www.bloomberg.com/news/2011-01-14/health-care-reit-totals-3-2b-in-2010-investments.html

[2] http://www.bloomberg.com/news/2011-01-14/health-care-reit-totals-3-2b-in-2010-investments.html