IHC’s Location Preferences and Supply & Demand Issue

Wally Smith:
And so Mike, where do you find properties? Where do you start? How do you source them?

Mike Jones:
Yeah. We look nationwide and we source primarily
through brokerage houses that focus on seniors housing. It’s a pretty niche industry, and we have built relationships with the larger brokerage houses and then some smaller ones throughout in different regions where we’ve purchased properties. And then the amount of experience here that we have in industry, we’ve also have built relationships with various operators. And so we’ll get deals off market from those operators that are operating communities. In fact, I’m traveling to Utah tomorrow to two communities that we’ve bid on that have not gone to market. They just brought them to us.

Wally Smith:
That is excellent. How many senior living and memory care facilities are there in the country?

Mike Jones:
That’s a good question. I don’t know. That’s a good question. I’ve never been asked how many there are. I’m sure there’s a standard-

Wally Smith:
A trade magazine somewhere for it, right?

Mike Jones:
I know. I know I have the data. I just would have to look it up.

Sly Pusiri:
The more important thing to know is that they need more. We need more.

Mike Jones:
Yeah, that’s correct. There’s not enough. That’s the right answer.

Patrick Lam:
Yeah. Something we talk about is… We don’t hear this in the last presidential election. Maybe we won’t hear it in 2024. But definitely by 2028, I think you’re going to hear that being the fact that there’s not enough supply for the demand of the baby boomer generation, that’s going to be a huge problem for America coming up.

Wally Smith:
Do you see a lot of these small residential? We see homes and communities that have four or five bedrooms in a ranch house right down the block that is a independent living or senior living facility. Is that a big trend right now, trying to fill that demand?

Mike Jones:
That has been part of the industry for some time. They typically don’t provide the level of care that you see in the communities that we purchase. It is more personal. I think it’s just a matter of preference. They are typically less expensive. But the level of care and the access to nursing in those communities is not as great as you would find in the communities that we offer.

Wally Smith:
As far as the area in the country, I know when we first started working with you guys, I think we were focused around the Atlanta area. You had two, three properties in that area. You just mentioned Utah a little bit ago. Is there an area? Are you trying to keep away from the coastal areas? Are you trying to keep in the warm areas? How do you determine that?

Mike Jones:
Yeah. We look at a number of different things. But from a demographic standpoint, you see a definite migration out of colder climates into warmer climates. We actually are looking at a number of properties right now in Florida.

Wally Smith:
I believe.

Mike Jones:
Yes. So to that point, we do listen. And so we are looking at tax-free states. We do have a couple deals in Nevada that we’ve
done. We have several coming out in Florida. We’re looking at several in Texas right now.

Wally Smith:
Oh, great.

Mike Jones:
All of which have been, they are their own little niche areas. And it took us a minute to get some headwinds in those and create relationships in those areas. But our pipeline is actually predominantly Florida and Texas right now. But we have a number in the Midwest. We’ll continue to grow there. As you know, our operating companies is operating a number of properties in the Midwest. So to create some economies of scale for our investors, we’ll continue to look there.

Wally Smith:
Good deal.