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Shouldn't vary too much from a standard mf model. Just add a line or two in the revenue section for services.
So I wasn’t sure if this was the case or not. Some Senior Housing models can get more detailed with staffing, dietary, etc.
Yeah for some mf deals we also break down union labor and their health insurance and benefits for details. May take a bit, but just roll them up to a single "Labor cost" line in the main tab and break them down at a separate tab to show you put thoughts into it. If you don't have experience, doubt they would ask you to go too deep.
2-year experience in this sector:
Faced multifamily tests for previous role and a couple of other interviews.
Senior Housing does not necessarily involves care but as other monkeys indicated, be ready for it and other revenue/costs line items.
Big thing is also DEF/DMF: Elderly paying an "enjoy now pay letter fee" that will be deducted at unit sale if not a rental model (can be shared ownership or outright sale). Usually capped at 10%/20% of the home value, accruing each year and kicking in at sale - Can't imagine a modeling test with DMF but definitely worth a read even to chat during interviews.
Potentially a service charge, potential ground rent...
As you quoted, can be very granular. Auriens (Oaktree Company) in London has a separate model for the pool P&L as an example... On the other hand, their modeling test was a 40+ land plots across Europe acquisition with different exit periods, whole analysis driven by Index&Match (weirdest ever).
Good luck!
Are you still in this sector? Can I PM?
Did you receive an offer from Auriens ?
Associate 3 in RE - OtherDid you receive an offer from Auriens ?No, I worked in smaller shops up until now. I'm looking to break into larger shops now. Also, I’m US based.
Fair enough - Did you apply ? How was the process? Many thanks 🙏
Haven’t applied anywhere just yet. Working on networking properly with teams that are in the space first to boost my chances of breaking in. Shops like blackstone, goldman, artemis, kayne anderson all are involved in the space currently.
Fair enough. Best of luck !
How is your search going?
Eh prob could be better. Reached out to some recruiters to share my resume with etc. networked with ppl at above firms etc. Nothing came of it just yet. I’m getting mixed feedback on the market. Some firms are hiring while some are laying off/freezing on the new hire front. I’m mainly brushing up on my technical skills.
Interviewed with Auriens, took ages between them, Oaktree, site visit, Auriens again and then modeling test in the office: spotted a mistake within inputs, the investment manager discovered the modeling test when he came for a little debrief (not aware of its content).
Weirdest test ever, data/excel questions followed by a land acquisition portfolio with multiple exit dates, everything driven by INDEX&MATCH (Saw the actual model from Oaktree regarding this project).
No offer, Auriens team was extremely nice & friendly, Oaktree team seemed fine (Friendly MD / VP looked exhausted and bored). Apparently they're pretty open minded for the future, based on my questions they would consider sale model, luxury exotic locations (Alpes, Greece, Islands...) But I think it's not for tomorrow...
At the end of the day, they were looking for someone more senior (been associate for a 1y, full time experience is 2/3y not their minimum 4y...).
My 2 cents: Only one site atm, not even 50% occupied, Elysian or Riverstone are already being brilliant on the luxury retirement housing segment (without being in Chelsea and reaching that level of "sophistication") with several JVs in place, far more capital deployed...
Another issue was Oaktree:
1. Not their single "project" in retirement housing so potential exit if that does not work
2. As they're willing to extract as much value as they can, even if Auriens does extremely well in the future, high bonus were not on the menu (been told max. 40%)! Great job for someone who trust the model, nice people I think, I would think that hours should be extremely chill (free amount of WFH), but need to be ready for loneliness and no company culture (empty office)!
It’s basically multifamily. The only item you might account for, though it’s probably overkill unless it’s a value add acquisition - average length of stay and move outs.
Effectively, you may only increase rents on in place tenants as they move out (unfortunately this usually means deceased). So if you have 60 beds in a 100 bed community occupied and you assumed an average length of stay of 30 months. Every month you have 2 move outs. Those two units are then put into your bucket to renovate and/or increase rents. You now have 40 vacant units plus two move outs and you slowly increase rents in than manner. Or you can just increase rents on your in place tenants too. But depends on the business plan.
This is a pretty ignorant view.
OP - Be prepared to model in variable expenses on a per day basis. Usually this would include food, utilities / labour (fixed and variable component). From a revenue perspective your base rent can only increase by the rental guideline, however, the service and ancillary can breakdown in a pretty detailed view. Again this would be on a per day basis. Further, make sure to include a detailed lease-up worksheet to show how you're going from spot to stabilized.
Got it thanks for the detailed response. Do you have a model or a practice test that you would be willing to share?
What a depressing asset class to work within. Can’t imagine being in a role specifically in only Senior Housing.
No kidding. Been adjacent/involved in it before and somewhat currently. COVID was fucking depressing.
I would add that I find it an overbuilt space, far less in demand than people think due to the practical constraint on the number of people who can actually afford to live in it (talking private pay AL/IL/MC here).
Pro tip: look at the number of “qualified caregivers” per square mile or within any given submarket per the average OM book. Then read the fine print and see what they call a “qualified caregiver”. Ask yourself if a guy making $100k can really afford to put his 80 year old mom in a $10k per month AL residence.
I don’t see the runway here that some do. I see an industry cluttered with 80% occupied, non-cash flowing, gorgeously built but operationally thorny properties that will be recapped every few years until people realize that no big rush of affluent boomers is coming over the hill to fill these things. Just my two cents.
Agreed, I think the Class A properties will start to trade well below replacement cost as no one will be paying the 10k a month rent and shifting to the 4500-6000 a month facilities that are just as nice and provide the same quality of care. I think over the next cycle active adult will be the real winner.
Suit yourself… baby boomers were born after 1945, by definition, which means the oldest are currently 78. Aging into senior housing really starts at 80+, so we’re about to see some really killer years, especially with the decline in construction starts over the past year
Sexy sector to talk about? No… sexy sector to have an economic interest in? 100%
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