Seniors Housing: Alpha vs. Beta

A Reflection on the Fat Tails

While our optimism regarding the multiyear growth prospects of our business continues to grow, it is also important to recognize that a rising tide does not necessarily lift all boats when it comes to the seniors housing business. This is not a commodity business. That is, despite the immense personal rewards of caring for the elderly population, our business is undoubtedly a challenging one, given its operational intensity that we are working tirelessly to solve through the buildout of our operating platform. This operational intensity has resulted in a wide dispersion of performance across the sector – or the fat tails in the parlance of statistics – a far cry from other commercial real estate sectors such as multifamily in which performance spreads are meaningfully tighter. The operators with whom we continue to grow are ones with a track record of success and a vision for sustaining that performance going forward. They also share a mindset and culture that mirrors our own where employees thrive on the constant internal debate of how to continuously improve, adapt, and lead the future of this business.