We believe that our senior housing strategy is more focused than many of our publicly-traded peers. The senior housing industry offers a full continuum of care to seniors, with product types that range from “mostly housing” (i.e., senior apartments) to “mostly healthcare” (i.e., skilled nursing, hospitals, etc.). We primarily focus on product types at the center of this continuum, namely independent living (“IL”) properties and assisted living / memory care (“AL/MC”) properties.

Source: U.S. Census Bureau, based on official estimates and projections. Population estimates for 2000-2011 are consistent with Census 2000 and Census 2010. Population data in the IDB for 2012-2050 are based on the 2009 National Projections – Low Series.

However, new supply has not kept pace with increased demand.

Source: National Investment Center for the Seniors Housing & Care Industry, 2016. Distribution of Existing Inventory by Year Opened (Seniors Housing - IL & AL).

Compared to our peers, we have significantly less exposure to skilled nursing facilities and hospitals. Our facilities are predominantly reliant on private pay sources of revenue, and as a result we have limited risk exposure to regulatory changes in the healthcare arena.

We believe that our focused portfolio of IL and AL/MC properties will allow investors to participate in the positive fundamentals of the senior housing sector without similar levels of risk exposure associated with higher acuity types of healthcare real estate.

Going forward, we expect significant investment opportunities in the U.S. senior housing market driven by three key factors: (i) growing demand from significant increases in the senior citizen population and only modest levels of new construction, (ii) highly fragmented ownership of senior housing properties among many smaller local (“mom and pop”) and regional owner/operators and (iii) operational improvement opportunities to increase property-level net operating income leveraging the experience and economies of scale of our Manager.