Finding Your Niche

Investors looking for ports in a stormy commercial real estate market could do worse than alternative asset classes such as cold storage and research and development space. That’s because they’re not so alternative anymore, according to experts at the annual MIPIM conference in the South of France. Speaking of alternative assets, senior housing is staging a slow comeback from the depths of the pandemic. Read on.

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— Tom Acitelli, Co-Deputy Editor

US Niche Asset Classes No Longer Niche to Investors: MIPIM Panelists

As trouble continues to stalk the office market — with even giants like Blackstone having to mitigate distress in their portfolios — and debt becomes harder to come by, America’s “niche” asset classes have moved into the spotlight. Panelists at MIPIM 2023 told the international stage in Cannes, France, that institutional investors are no longer shying away from assets such as cold storage, data centers, outdoor industrial and properties that generally fall into the “other” category. Instead, they’re specifically looking for them. “Investors are actually seeking that out more and more,” said Shawn Lese, the chief investment officer and head of funds management for Nuveen in the U.S., during the panel entitled “What’s next for U.S. real estate?” “In the past, they were like, ‘I just don’t understand it, that’s not institutional, I won’t go into it.’”

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Senior Housing Recovers — Slowly — From the Pandemic

Talk about a gray area. Hundreds of nursing homes shuttered nationwide during the pandemic, hastening a trend that was growing even before COVID-19. Meanwhile, the senior housing industry appears to be rebounding after plunging to such lows during the pandemic that observers were questioning its long-term health. More than 450 nursing homes have closed since the start of the pandemic, according to statistics from nonprofit trade groups the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL). Roughly 150 of them shuttered in 2022, as conditions exacerbated by nearly three years of the pandemic caught up with operators. A further 307 closed in 2020 and 2021, other pandemic years. The grand total for the three pandemic years, though, is comparable to the total for the five years from 2015 through 2019. At the same time, the volume of nursing home sales declined and stayed down.

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