Signs of life: capital markets may jumpstart once-stagnant assisted living sector.(Special Report--Assisted Living)

If you've been waiting patiently to invest in the assisted living industry, 2004 might be your year.

Industry, economic and financial trends indicate this year is a turning point in the health of the recently maligned assisted living sector, with capital markets ready to make money available to eager entrepreneurs.

Assisted living industry experts believe the market s stabilizing and the economy has strongly rebounded from the 2000-2002 recess on. Most of these experts predict that, at the very least, a gradual yet sustainable recovery will begin by year's end.

"The lending universe is expanding significantly this year," said Robert Noonan, chief financial officer at Benchmark Assisted Living in Wellesley Hills, Mass. "There are a myriad of sources out there now, tracking the industry and taking position, [and making] transactions."

Those financial sources include public and private real estate investment trusts (REITs), institutional investors and companies that are specifically capitalizing themselves for the purpose of making investments, according to Noonan. "There's clearly more liquidity in the marketplace," he said. "I'd be surprised it we looked back on 2004 and didn't see more stabilized acquisitions [than in the past]."

Some industry leaders, such as Chris Coates, past chairman of the Assisted Living Federation of America (ALFA) in Fairfax, Va., are even more bullish about the prospects. "While an over-supply of product in the past five years left some industry stocks temporarily out of favor with investors, assisted living companies now are [seeing] results that point to growth--including increased earnings, reduced debt, repositioning of assets and major transactions," Coates said during a recent Assisted Living Investor Conference hosted by ALFA. "The industry is poised for expansion in the coming months and years." …