Craig Bernfield, chairman and CEO of Aviv REIT (NYSE: AVIV), joined REIT.com for a CEO Spotlight video interview in Chicago at REITWeek 2013: NAREIT’s Investor Forum.
Aviv REIT held its initial public offering in 2013. Bernfield discussed some of the factors that led to the company going public.
“In many respects we were building towards becoming a public company for a long time,” Bernfield said. “We’ve been investors in the space for decades. I, personally, have been building the company for the last 24 years. The timing was more evolutionary, as opposed to market timing. We felt that there was a tremendous opportunity to be consolidators in our sector, which we have been to the extent of our capabilities and resources. We felt that if we tapped the public market and had the more permanent capital base and lower our cost of capital over time, it would put us in a better position to take advantage of the opportunities that we know are out there.”
Bernfield discussed the firm’s plans for its freshly raised capital.
“We are expecting to have another good year from an acquisition and investment standpoint, consistent with the last couple of years when we had capital behind us,” he said. “We’re very busy with a lot of inbound opportunities, as well as the inbred opportunities we have.”
Bernfield was asked about potential challenges facing Aviv REIT.
“I’ve been an investor in this space for a long time, and we’ve had a tremendous run as a company—tremendous success, great relationships,” he said. “I look at the space today and say that it doesn’t really keep me up at night. You’ve got demographics in the 65-and-older and 85-and-older population. We’re not looking at a chart anymore. We’re looking at it, and it’s exploding."
Bernfield noted that Medicare and Medicaid spending has been growing in the course of the last 10 years at a compounded rate of 4 percent annually. The expenditures on skilled nursing services and facilities in the United States are expected to double in the next 10 years, according to Bernfield.
“I think it’s a really good dynamic,” he said.