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The REIT Weekly – Home Ownership Increasingly Difficult

This week in REIT news covers emerging changes in the senior housing sectors and the effects of the lending crisis among homebuyers in the United States. Meanwhile, Italy moves forward towards fostering an investor-friendly country through their latest redevelopment project.

With senior housing annual inventory growth rates steadily increasing, many companies are scrambling to enter the growing industry. According to Chris Cain, senior vice president of BBVA Compass, “the component that is the X factor is 100% the cash equity.”

Hines Italia SGR recently announced its plan to redevelop two grand hotels in Venice, Italy. Their latest project is part of a public-private joint venture that features private companies working with the state to produce real estate income. With these goals in mind, Hines is planning to raise $380 million to fund the renovation project.

Americans with low credit scores are finding it increasingly difficult to secure a mortgage loan. With the increase in federal regulations, lack of coordination between regulatory agencies, and high compliance costs for small lenders, potential homebuyers are struggling to keep up with these demanding challenges. However with less homebuyers in the market, there will be an increase in renters, which reflects positively for companies developing multi-family properties.

According to industry experts, senior healthcare communities are undergoing major changes. With the growing shift in urbanization, senior housing facilities are moving towards a greater focus on individual services, an increase in food quality, and overall visitor comfort. Brendan Morrow, director of senior living for the Weitz Co. states, “There is a significant movement within the high-acuity environments to strip away the physical reminders of the health needs. We are seeing a move toward healthcare buildings that look like mid- to high-level hotels.”