Starting this year, 10,000 Americans will turn 80 every day. As members of the Baby Boomer generation continue to age, the demographic shift known as the “Silver Tsunami” is likely to have a dramatic impact on the senior housing market.
This growing asset class has caught the attention of many real estate investors, but the industry is notoriously difficult to break into thanks to high regulatory and operational barriers. That’s where 1031 Crowdfunding comes in. The exclusive marketplace gives investors access to this booming market. Edward Fernandez, President and CEO of 1031 Crowdfunding, told us how his platform is poised to take advantage of the growth in the senior housing market.
A high effort, high reward asset class
Senior housing is a complex, high-barrier sector, featuring assets involving significant regulatory, operational and capital requirements.
“You just can’t go out, buy a senior housing facility, and think that you can run it on your own,” says Fernandez. “To be involved in senior housing, you have to have relationships.”
He compares senior housing to the hotel industry, where it’s easier to get started if you’re working with an experienced operator like Hyatt or Marriott. And, as with hospitality, location is crucial. While a developer could build a multi-family apartment building almost anywhere, senior housing works differently.
“You can’t have an asset in the middle of nowhere and expect that occupancy is going to be where it needs to be,” he explains. “You want to have facilities in areas where people gravitate in regards to retirement.”
As Baby Boomers reach the age when many begin moving into senior housing, rising demand for these communities presents an attractive investment opportunity. Fernandez, along with the industry at large, sees demand for senior housing continuing to increase. He compares it to the ongoing need for auto mechanics.
“Cars are always going to break, right? And as long as people are still getting old, which we’re all going to do someday, we’re all going to need a place to stay.”
The 1031 Crowdfunding advantage
1031 Crowdfunding offers an online marketplace that grants accredited investors access to institutional-quality real estate investments, and the company’s experienced management team provides white-glove service every step of the way. The platform, designed to make tax-advantaged real estate investing more efficient, includes extensive due diligence materials and proprietary tools so investors can make informed decisions.
“Typically, investors call us six months before they’re going to sell something,” explains Fernandez. “For a six-month period, we’re working with them and educating them, so by the time they need to execute, they feel very comfortable doing business with us.”
From the investors’ perspective, 1031 Crowdfunding simplifies the process of participating in a complex asset class like senior housing. The offerings on the platform are ready-to-invest, with many able to close in just a few days. The platform makes it easy for investors interested in this asset class.
Senior Housing is their Specialty
In addition to functioning as a marketplace, 1031 Crowdfunding also serves as a sponsor through their affiliate 1031 CF Properties, giving them control over the assets in their portfolio, which is especially important in the senior housing space.
“Here at 1031 Crowdfunding, we offer third-party products—apartments, hotels, etc.—as a broker,” he explains, “but as a sponsor, or a company that creates these products, we focus on senior housing, and have been for 18 years.”
As a leading sponsor in this space, their team has extensive experience creating offerings with an investor-first mindset. “We put it all in a little box with a bow. We buy the assets, we know the operator, and we asset-manage the operator,” says Fernandez. “You not only get your foot in the door to senior housing, but you also get a professionally managed portfolio from an experienced team.” ”
Protecting investors
In addition to developing strong relationships with others in the senior housing sector, Fernandez is sensitive to the needs of investors, and that affects how 1031 Crowdfunding does business.
“No matter what’s happening in the market, our investors can count on us,” says Fernandez. “We take pride in that consistency. It’s not just about managing real estate—it’s about earning and keeping our investors’ trust.”
Senior housing is a highly regulated asset class. Because of this, operators and sponsors must be ready to adapt when the rules or market conditions change. Even through those shifts—whether it was new regulations, occupancy changes, or the challenges brought on by the pandemic—1031 Crowdfunding has never missed a distribution to its investors.
“The people who invest with us are 65 or older, they’re retired, and they’re using a lot of their net worth to do a 1031 exchange. The income is very material to them,” says Fernandez. “We want to protect their investment as seriously as possible.”
To learn more about 1031 Crowdfunding, visit their website.