WHITE PLAINS, NEW YORK (October 26, 2022) – Robert Ranieri, senior vice president/managing director of Northmarq’s White Plains-based regional office, provided his insight into the senior housing sector with Propmodo in their recent story, “The Silver Tsunami’s Impact on Real Estate.”
While it has been considered a niche real estate investment for years, the story notes that demand for senior housing is stronger than ever before. Shifting demographics in the United States impacted this demand, with the sector prepped for rapid growth over the next decade. But with the umbrella of senior housing covering multiple development types, a large amount of nuance exists.
Another complicating factor is the increased lifespan of senior citizens. This increase not only extends senior housing stays, but also delays when senior citizens transition into senior housing.
“You know, fortunately we’re all healthier, so we’re staying in our home for longer,” Ranieri said. “Twenty years ago, everyone thought that once a person got to be 60 years old, they would move to a senior housing complex, whether it was high-end or something less glitzy, but that simply isn’t the case anymore.”
More and more elderly residents are choosing to age in place, but this trend is not enough to offset future demand for other types of senior housing. Projections indicate that the senior housing industry is stepping into a decade-long investment cycle, and even so, the sector will still be undersupplied by 600,000 units by 2045. In order to support peak demand levels, there needs to be an annual supply growth north of 25,000.
In theory, it should make a favorable scenario for lenders, but that’s not necessarily the case according to Ranieri. “I’m from the lending side, and the fact that only a few people would be willing to lend on a senior housing product just tells you, at least from my perspective, that it’s got to be high-yield,” he said. “Investors are going to expect higher returns and higher yields because it’s so labor-intensive. It’s not just housing, it’s care of people, whether they’re healthy and active or not.”
Other topics include:
The labor-intensive side of the industry
Breaking out of the “niche” status
Wartburg’s Friedrichs Affordable Senior Housing receives Community Involvement Grant, courtesy of NorthMarq’s White Plains office
MINNEAPOLIS, MINNESOTA (November 24, 2020) – As part of NorthMarq’s annual Community Involvement Grant program, Wartburg’s Friedrichs Affordable Senior Housing program received one of the 18 grants awarded in 2020. Wartburg, nominated by Robert Ranieri, NorthMarq’s White Plains’ Managing Director and Wartburg’s Board Chairman, has received a grant each of the three program years.
“This community involvement grant has meant so much to Wartburg, and its mission to provide affordable housing to senior citizens in this area. The funds are targeted for social programs at the housing complex designed for seniors such as exercise classes, transportation to local events, shopping excursions, and music classes. Since the Grants have been provided, they have been able to offer more programs and services to these low-income senior residents,” said Ranieri.
In 2018, NorthMarq created a Community fund to support organizations that focus on improving access to affordable housing or eradicating homelessness in the markets where the company operates. This initiative aligns with the Pohlad Companies’, NorthMarq’s parent company, and the Pohlad Foundation’s focus on these areas of community need.
“We are honored to receive this donation from NorthMarq. It will help us to continue our work on wellness and issues of loneliness and isolation,” said Dr. David J. Gentner, Wartburg’s President and CEO. “The COVID-19 pandemic has changed how we interact with the people we most care about, particularly if you are in the 65-plus age group.” “While social distancing and self-quarantine limits the exposure to infection, it also limits social interactions and increases loneliness and feelings of isolation. The result can be a real health concern. Even before the pandemic, many adults over 65 were socially isolated,” according to Gentner.
Friedrichs opened on Wartburg’s 34-acre campus in 2013, offering beautiful studio and one-bedroom handicap-accessible apartments for the 62+ community of active seniors. Residents have access to amenities such as a sunlit multipurpose community room, a state-of-the-art fitness room, a library, laundry on each floor, and free assigned parking. The first-ever Leadership in Energy & Environmental Design certified building in Mount Vernon, Friedrichs boasts bamboo floors and individually thermostatic heating and air-conditioned units.
“I am proud that NorthMarq recognizes the importance of supporting non-profits that help support affordable housing, and I am personally pleased that Wartburg was a well-deserved recipient of these funds that will help the residents of Friedrichs,” said Ranieri.
NorthMarq’s White Plains office awards grant to senior community and healthcare service provider
WHITE PLAINS, NEW YORK (December 26, 2019) – NorthMarq’s White Plains regional office recently presented Wartburg with a $5,000 grant to assist with its mission to provide affordable senior housing and residential/outpatient services to members of the Bronxville and Mt. Vernon communities in New York.
Founded in in 1865, the organization has sought to offer healing and hope via its operations covering spiritual, physical, mental and emotional health. Wartburg provides a wide range of services to both residents and people in their own homes. From independent, assisted living and award-winning nursing home care to rehabilitation, home care and adult day care services.
“We are extremely happy to present this grant to Wartburg,” said Robert Ranieri, managing director of NorthMarq’s White Plains regional office. “Last year our donation helped fund yoga and exercises and we look forward to our contribution being leveraged by the staff at Wartburg this year.”
The White Plains office’s grant is part of NorthMarq’s larger initiative to support organizations addressing homelessness and affordable housing. NorthMarq awarded grants to 12 organizations in 11 different cities across the county. Check out the story here.
Robert Ranieri discusses state of the market in Westchester
Robert Ranieri joined four other NorthMarq Capital producers to discuss and answer questions regarding tertiary and secondary markets. In his responses he pointed out challenges, such as the possible concern of oversupply in the multifamily market in Westchester and Fairfield Counties, and opportunities, such as Fairfield County’s 18+ retail properties traded in 2016 (allowing for more chances for acquisition financing in the market). Read Robert’s responses below.
1. What property type/niche are seeing/hearing about in your market? What conditions make this possible?
Multifamily remains the base of transactions in Westchester County and Fairfield Counties though some concerns have arisen regarding oversupply in the more urban markets. Most development is transit oriented. Suburban areas are typically retail driven as the markets are littered with single family homes. Retail is mostly small strip centers and there has been good trading activity in both Westchester and Fairfield Counties creating strong acquisition lending opportunities. The retail demand is for supermarket anchored centers. Office space is slowly coming out of the basement, though still seeing average vacancies of 20 percent. The Westchester County market saw a 1.8 percent decline in employment in the first quarter of 2017 which puts a slowdown on office space recovery. Fairfield County was down just 0.5 percent in the first quarter but office is driven mostly by larger spaces leasing or coming to market. Leasing activity has been strong in Fairfield County, driven by Stamford with 237,958 of the nearly 630,000 square feet (up 80 percent year over year) in the first quarter. Vacancy increased by 240 basis points, but this was due primarily to 550,000 sq. ft. coming online between two properties in Stamford and Norwalk. In general, the market is in good shape.
2. What type of borrowers/lenders are in your market? For example; is it primarily agency or are bank and life companies also part of the mix? Why?
Borrowers in Westchester County tend to lean more towards bank lending, having smaller portfolios, and accepting the recourse that banks require in favor of a simple underwriting process and competitive rates. Life companies remain competitive for those borrowers looking for non-recourse but cannot always compete in the market on leverage. Agency lending is in the mix for borrowers who have experience with the more detailed underwriting process but they are not always competitive with the banks on rate for new customers with smaller portfolios. There is still many family owned borrowers in Westchester and Fairfield although the office sector is dominated by larger institutional players. The new multifamily development is also mainly larger institutional players.
3. What are the unique challenges facing your market?
In the urban areas of both Westchester and Fairfield Counties there has been some concern of oversupply in the multifamily market. Westchester County is expecting over 1,300 units to come online in the next two years while Fairfield County is expected to see over 1,500 units. Demand, while steady in the markets, is expected to lag behind these numbers creating an upward trend in vacancies. Westchester should fare better as inventory is more spread out, but Fairfield County is already one of the highest average vacancies in the region at 7.4 percent. Both these counties are experiencing higher real estate taxes and some movement out of the area to cheaper cost options.
4. What are the unique opportunities present in your market?
There have been limited sales in Westchester County, but Fairfield County saw 18+ retail properties traded in 2016, creating opportunities for acquisition financing in the market. Larger scale buyers and anchored centers allow for life company executions. Real estate fundamentals are still relatively strong but Westchester and Fairfield do well when NYC does well. Any downturn there, hurts us here.