Updated 16 days ago on . Most recent reply
Broker question: off-market senior housing
Commercial brokers that are active in senior housing & multifamily - I'm curious how you are sourcing off-market deals right now. What is actually driving owner conversations today? Is it long-term relationships, referrals, cold outreach, something else?
Interested in learning from different strategies people are using!
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#1 Multi-Family and Apartment Investing Contributor
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I'm not a broker of senior housing, but a buyer so I'll chime in. Since June I've closed on 21 off-market senior housing facilities in 4 states and have 4 more under contract in two states. All of these were sourced off-market, not from brokers.
What's led to that success is entirely driven by long-term relationships. The executive running my senior housing platform has 20+ years in the senior housing industry and knows all the players--owners, operators, REITs, lenders, and so on. Every deal we've bought came from those relationships and networking with colleagues.
One 9-property portfolio deal was brought to us by an operator who called us because the property owner was looking to sell. After closing, that same operator connected us with a lender who was foreclosing on two facilities. We are closing on those next week. We bought a 7-property portfolio that resulted in a chance reconnection with an old friend at a senior housing conference. We brought a 2-property distressed deal from a tip we got from a lender who was contacted by a borrower in trouble.
What we aren't doing is bidding on marketed properties, playing the "best and final" bidding rounds, and all that garbage. One advantage to bidding on marketed properties is the process is quick. Receive the deal, tour, submit LOI, submit best and final LOI, have the broker jack you up for another couple hundred grand and a non-refundable deposit, and then get an accepted LOI, all in the span of 4-8 weeks.
This off-market stuff takes months or even years. We closed on one facility in October where we wrote the first offer last November. Another one has been going back and forth with offers and counter offers for 10 months. And there is another deal where we've been talking to the owner for 10 years, and are finally getting closer.
When you pay too much it's amazing how fast you can buy. When you are disciplined it can take an eternity.