Keppel Ceo Of Senior Living: Capital Providers ‘itching To Deploy’ Dollars In 2025

Capital providers old and new are eyeing the senior living industry with interest, and they are searching for new opportunities to put their money to work – that’s the good news, according to Kai Hsiao, CEO of Senior Living at Keppel Capital.

The bad news is that debt and financing are still “TBD” and obstacles to new deals remain in 2025. Sponsors and capital providers have adopted a wait-and-see mindset as interest rate and cap rate pressure have kept them on the sidelines.

“People were hoping there’d be more rate cuts, and who knows what’s going to happen there because of the environment we’re in today,” he told Senior Housing News this week.

Senior living investments have been mired in challenges for the last couple of years. Hsiao likened conditions in 2023 to a “middle-school dance,” with buyers and sellers “just staring at each other.” More transactions crossed the finish line in 2024, but mostly “doubles and singles and not big homers” he added.

However, the outlook for new senior living transactions is better in 2025 than it was a year ago, and Hsiao believes it’s only a matter of time before conditions become more favorable for companies looking to dole out dollars, potentially leading to new financing activity. He pointed to the senior living industry’s past performance and current supply-demand fundamentals as proof that it’s “still a strong real estate class” despite its challenges in the Covid-19 pandemic.

“The question becomes how long they are willing to wait for what they believe are going to be better rates when it comes to debt,” Hsiao said. “Two years ago, you could make 10 phone calls and no one would call you back when you’re dialing for dollars … that’s not the case today.”

Hsiao is an industry veteran who was the CEO of operator Eclipse Senior Living before it shuttered in 2022. He also was previously senior managing director of senior housing properties at HCP, the company that later changed its name to Healthpeak (NYSE: PEAK); and he was president and CEO of Holiday Retirement before that.

He has led Singapore-based Keppel’s senior living and health care investment strategy since he joined the company in 2022. Since then, Keppel has invested in senior living and healthcare on two continents, with holdings in the U.S. and China and aspirations to invest in the U.K.

The company’s recent investments include opening an assisted living community in Nanjing, China, last year. Keppel owns a 50% ownership stake in senior living operator Watermark Retirement Communities.

As he surveys the investment market for senior living, Hsiao sees big demographic opportunities in places like the U.K. – which he likened to the U.S. senior living market 15 years ago – and China, where the country’s previous one-child policy has led to a bottleneck in the number of people available to care for their aging parents.

“In the U.K., new will beat old supply,” he said. “And in China, while you may not own the supply, there’s definitely demand for people to manage it.”

Hsiao has long believed that an insurer might make a big investment in senior living by acquiring an operating platform in an effort to better control health outcomes among its beneficiaries.

In 2025, he still believes insurers and similar companies could make such a move in the future. And that is especially true given the rise of complex data-collection, a growing trend in senior living as more operators move toward value-based care models. More data would give operators a greater ability to show potential owners that their operations can affect outcomes in a positive and less expensive way than other care settings.

“As you know, more senior living communities are getting plugged into value based care,” he said. “I think that opens the eyes of folks at Aetna or UnitedHealth, who might say ‘Oh, wait a minute, the data is there now.’”

But even if insurers don’t transact in senior living any time soon, more data and better alignment will only aid senior living operators as real estate investment trusts (REITs) like Ventas (NYSE: VTR) and Welltower (NYSE: WELL) move increasingly toward RIDEA management structures.

“Some operators, yes, they want to know what’s going on in their buildings. But it’s also that they’re trying to answer questions for capital partners and they don’t know how to right now because of the lack of data,” Hsiao said. “The demands of capital partners are higher than they’ve ever been before.”

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