Harbert Seniors Housing Fund announces final close

Harbert Management Corp. has held a final close for its Harbert Seniors Housing Fund I, raising $209 million.

HSHF I invests in seniors housing properties in the United States.

HSHF I has already invested and committed approximately $103 million through seven transactions or 24 properties creating a diverse portfolio of seniors housing properties across geography, operator and acuity. The investment team has a robust pipeline and will continue to focus on investments that exhibit consistent, reliable cash flow and value appreciation potential.

The National Investment Center for Seniors Housing & Care reports that occupancy rates in the independent living niche were 90.6 percent on average in the second quarter and 86.5 percent for the assisted living market.

Annual absorption in the seniors housing sector was at 3 percent as of the second quarter, which was the fastest pace since 2006, when the NIC started to report this information. And seniors housing annual inventory growth rate in the second quarter was at 3.9 percent, which was also its fastest pace since 2006.

Total transaction volume in the seniors housing & care sector fell to $14.2 billion last year from $21.9 billion in 2015, and was down by 17 percent year-over-year during the first quarter 2017, according to CBRE. Last year’s transaction volume still was 5.2 percent above the average annual volume since 2008, a period that includes two record-setting years.

Investor interest is gravitating to the more lifestyle-focused segments of seniors housing, with 40 percent of survey respondents selecting independent living as offering the greatest opportunity for investment in 2017.

CBRE professionals expect valuations to remain stable in 2017 with a strong long-term outlook. The industry’s fundamentals suggest the necessity for more capacity over the long term, with short-term oversupply in select markets becoming more likely as a result of recent record-setting construction levels.