Who? I know that’s your first thought. It was my first thought when I read about them last fall. Ventas Inc. is a REIT (Real Estate Investment Trust). Their singular focus has been the very rapid acquisition of housing for the elderly, including assisted living and senior apartments. Here’s a number for you: according to the LA Times, Ventas has, since last October, spent in cash and stock (not including acquired debt), $15.8 Billion, and in doing so become the largest holder of housing for the elderly in the nation, and most of us have never even heard of them.
So what can we, the average homeowner and investor learn from Ventas? Quite simply, we are getting older. Duh, right? But here’s my point: if you are a baby boomer homeowner or prospective home buyer, (1946-1962) or even one of the earliest Gen “X-er” (1963-1981), what is your next home going to look like? If you’re a home builder, what are you going to build? And if you are a real estate investor, what types of properties should you be looking at long-term? If you are thinking single story, ding, ding, ding, you win. Yet finding one, as I was once told by an older client of mine, is like “searching for hen’s teeth”, it’s tough.
Will any one story do? The answer here is a definite no. Consider the post WWII housing boom in which 1000’s of ranch and bungalow homes were built for the returning GI’s. Will those be good for you? Perhaps, but not necessarily. For the older client seeking a one story, they are often not in the right locations and they are just so old. But if you’re an investor, they make great assisted living facilities. These homes are small; 3 bedrooms and 2 baths. But a bungalow like this is capable of handling 2-4 very elderly folks with a full-time rotating staff. Location, as with all real estate is important. However, in this segment I would argue a little less so. After all, if it’s the waiting room for heaven, does a little busy street noise really matter to the occupant?
What about those of us thinking about our last home purchase? I would argue that this type of older home is not for us. Rather, we want low maintenance, safe, close to nice shopping, maybe even gated. In a word, we want newer. Yet builders have not been building nearly enough single story homes. In fact in many Southern California communities, builders don’t build any. “Just like finding hen’s teeth”…
This challenge is also an opportunity. If you can acquire a nice, newer one story, close to shopping and a hospital, not only will you probably never have to sell, but you also have found an excellent investment. So as you contemplate that next move, be proactive and think about Ventas Inc. and what they are doing, and remember at the end of the day, none of us is getting any younger.