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Nearly 40 million Americans invest in REITs

CNL Preparing for Aging Boomers with Real Estate Purchases

09/19/2012 | By Carisa Chappell

CNL Preparing for Aging Boomers with Real Estate Purchases

CNL Healthcare Trust, an investment offering planning to qualify as a non-traded REIT, is building its portfolio to include more senior housing and health care real estate to accommodate the aging baby boomer population and need for community-based health facilities. It's doing so, in part, by focusing on outpatient care.

"The delivery of health care has changed dramatically over the last 20 or 30 years," said Sharon Yester, chief of asset management for CNL Financial Group, the investment management firm sponsoring CNL Healthcare, in an interview with REIT.com. "We see a lot less going on in hospitals and more of a focus on outpatient facilities."

People want more outpatient same-day services in the communities where they live, according to Yester. Furthermore, she said it's costly to retrofit existing medical offices. Because CNL is better capitalized than most competitors, it has a competitive advantage in the acquisitions market.

"I see health care continuing to move out of the acute health sector," Yester said. "You don't have to go to the hospital for knee surgery. We're looking to see acute care close to home treat those types of symptoms."

Since launching in 2011, CNL Healthcare Trust has acquired interests in senior housing assets valued at more than $350 million. This month, the company acquired three senior housing communities in Iowa for a total of $18.8 million and agreed to invest in a new $21.6 million assisted living and memory care development project in Florida. In June, the Orlando, Fla.-based company entered into a joint venture with Sunrise Senior Living to acquire seven senior housing communities for approximately $226 million.

"I think there's a huge demand for senior housing driven by the 65-plus population," "A lot of the need is also driven by ages 70 and up, who need monitoring in the cooking of meals, help with bathing, dressing and making sure they get to activities because they are unable to drive."

As this segment of the population reaches the age of 75 and older, living communities that offer assistance with memory care, Alzheimer's and other types of impairment will become more important, according to Yester.

The nation's population of those aged 65 and older will double between 2000 and 2030, according to the Federal Administration on Aging. That would equate to up to one out of every five Americans.