NIC Chats Podcast with Lynn Jerath

Host Lisa McCracken welcomes Lynn Jerath, founder and president of Citrine Investment Group and a Forbes 50 Over 50 honoree, for an engaging conversation about the role of family offices in senior housing investment. 

Lynn shares her 30-year career journey—from major real estate funds to launching Citrine—and offers an insider’s perspective on what family offices are, how to build relationships with them, and why their flexible approach suits the specialized world of senior housing. 

The conversation covers direct vs. fund investments, key advice for new investors, and Lynn’s bullish outlook for senior housing amid rising demand and limited new supply. Discover practical tips for accessing capital and hear what makes senior housing a compelling opportunity for today’s investors. 

If you’re interested in how capital is flowing into senior housing, informed by practical advice from an industry leader, this is an episode you won’t want to miss. 

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Transcript

Lisa McCracken: Hi everyone. This is Lisa McCracken with NIC. I welcome you to the latest edition of the NIC Chats podcast. I'm very excited to have a new guest to our podcast today, Lynn Jerath. She's the founder and president of Citrine Investment Group. Welcome Lynn. Thanks for being with me today.  

Okay, before I ask you to give more information on your background so everybody knows, you know, who you are, I need to congratulate you because you recently were recognized as Forbes 50 over 50. That's a big deal.  

Lynn Jerath: Yes, it was a thrill. I'm so excited. I'm just still in shock that I received that recognition and I'm really excited for the senior housing space to get the recognition along with me, so it's great.  

Lisa McCracken: Well, folks like you in our space definitely help raise the visibility for sure. Okay. Can you give us a little background on, on you professionally, the organization that you're with and anything that would be just helpful to set the stage for our conversation?  

Lynn Jerath: Absolutely. So, as you said, I'm the founder and president of Citrine Investment Group. Citrine is focused on senior housing investing across a few regions of the United States. Prior to Citrine, I have a 30-year track record in the real estate investment space, specifically at opportunistic funds, large funds at Goldman Sachs and Carlysle Group, and also at Gem Realty Capital, which is in Chicago, and that's where Citrine is based today. 
For our current mandate, we are laser focused on senior housing, on assisted living, memory care, independent living, and CCRC turnarounds, and we're focused on the Midwest, Mid-Atlantic and Southeast as far as geography.  

Lisa McCracken: Awesome. And when did you found Citrine.

Lynn Jerath: It's been many years, but I started focusing on private equity real estate about four years ago at Citrine. Prior to that we were doing a variety of different activities in the space.

Lisa McCracken: Okay, got it, very cool. So one of the reasons that we were excited to, to talk to you is your obviously experience in senior housing. We're gonna talk a little bit about that in our time here about your outlook for the sector and so forth. But you also have an intimate understanding of the family office perspective, which, NIC has been putting a good bit of time in terms of educating.
Potential investors from the family office space on our sector, raising the visibility. I know you and I were talking earlier about it's important to us to make sure we've got the right capital at the right time, and that people are making smart investments and so forth.
So you, you are a nice bridge to that space. I know you're a panelist in our, one of our sessions at our fall conference coming up in September, I wanna start very basic here. We're gonna talk a little bit the office stuff and then we're gonna get into senior housing investments. But what is a family office? 'cause I do think sometimes there's some misconceptions about this. So how do you define family office?  

Lynn Jerath: I'm so glad you started with this question because I do think the term is thrown around a lot and I'm not sure how many people really know what it is. So I'll define it as I see it. A family office is an organization of a person or a family's financial assets to bring them process and ease, and perhaps even professional management, of their capital and from a philanthropy standpoint, an investment standpoint, and an operations standpoint. So typically, or often, the family office is formed - I'd say an easy way to think of it is, let's say a person sells a company or a family has had a company in their ownership for many generations and sells or monetizes a certain portion of their ownership. At that point, their assets go from being tied up in this specific company to being liquid, and then all of a sudden the needs of their family change. And oftentimes it's at a level or scale that the family or the individual does not feel comfortable managing themselves so they'll bring in various experts.  

Lisa McCracken: Yeah it's been fascinating for me personally over the past year and a half just  to get a little more educated on that space and I think one of the things where there's probably some increased attention on family offices is I heard from, I know a colleague of yours recently that I think it's been since the year 2000, I forget what number, I'm gonna say 75%. I might be wrong with that, but ballpark. That there's been a significant growth in the number of family offices in the U.S. that there's been great sort of generational wealth that's been accumulated and such a relatively young space, for lack of a better term, what opportunities do you think that this presents for, again, senior housing and when you think about potential investment partners or any potential challenges as well, knowing that we might still be in a lot of first generation, maybe early second generation. I am curious to know your take on that.  

Lynn Jerath: Yeah, so I think the reason you're seeing so many more family offices, and also you're hearing the term more, is that you are finding more families or people organizing their assets. So perhaps those concepts existed in the past, but the organization didn't exist. And like anything, when you get organized, you have more opportunity. 
And so I think that is the opportunity for senior housing, as families choose to become more formalized in their investment process and their focus areas, their strategies, they can consider a sector like senior housing more, I don't wanna say more easily, but more thoughtfully because they've decided, okay, this is a target area for us, and let's see if it meets our requirements from a risk and return standpoint. 

 
Yes. And I do think there are more family offices today as well for a variety of reasons. Whether it's from, investing in telecom or technology or certain industries that have just created generational wealth as you called it. And with that comes the ability to invest in sectors that are not just stocks and bonds.  

Lisa McCracken: One of the things we get asked very regularly… “How do I connect with these people?” I've heard the term, I've heard family offices be described as a little fragmented… it's not like there's just one clear pipeline… very relational and so forth. First of all, would you agree that it's a bit fragmented? Yes or no? And then what advice do you have for people of how to best connect with family offices? Is this a local play? Is it through the family? Is it through their advisor? That was like five questions in one, but love your thoughts.  

Lynn Jerath: Yes. For sure. I do agree it's fragmented and it's maybe not, one could say senior housing is fragmented. There's so many operators and players in the space. I think family offices, it's not the same as fragmentation in senior housing. The reason that it feels less accessible is because no family office has to do X, Y, or Z, right? 
They make their rules, they're, they are their own client, if you will. So there are examples of multi-family offices, meaning that a group of family offices come together and share the resources of an office. So perhaps in those cases it becomes more of a commercial operation, if you will, but for all the other family offices, they could change their mandate. 
They're closely held, right? There's the family that leads the strategy and the mandate and the decision making. So that is why I feel that the space is hard to access because it's not like a private equity fund where the people who work there have a job and a mandate to put out. Capital into certain types of investments they've promised their investors. Here's our focus areas. Here's how much time we'll take to invest your capital. Here's the returns we're targeting for family offices. It's not like that, right? They may have their own mandate, but they decide there's nobody else looking over their shoulder to say, Hey, how much did you put out this year? Why didn't you hit your goal? 
So that, that's the answer on why it seems fragmented. And then in terms of accessing family offices, I definitely agree. It is not a straight line. It's not like you can Google family office and you get phone numbers and maybe you do get phone numbers. I should Google and see… yeah, and maybe if you, maybe you can get the phone numbers, but will they take your call is not a given. 
But I think the place to start is your own relationships and seeing who you may already know. Sometimes you know people and you don't even know that they are involved with a family office. That can happen. And then there are intermediaries who do have wonderful relationships with family offices. It is a longer lead cycle, I would say, than with a private equity firm or… financing debt, and you go with a mortgage broker… that's a… more known than it is if you're attracting family office capital. 
So I would say, try to find a bridge. Someone who knows someone and have informal conversations. Don't expect that the first time you talk to someone at a family office, you're going to pitch them the deal and they're gonna say yes. Because for family offices in particular. They really do want to get to know who they're working with very well, and it may take them quite a while before they say, yes, I'll invest with you. Trust is really important to family offices. And knowing that you have the acumen to do what you say you're gonna do is also really important.  

Lisa McCracken: Let’s talk about types of investments… funds vs direct. Do you see one more commonly than another and are there di—there's obviously gonna be a different process, with a direct investment versus indirect.  

Lynn Jerath: Yes. So there's a lot to that question. On the fund side, there are some family offices that will only invest in funds. They will not go direct. And then there's the opposite too, where there's some family offices that will only invest directly and will not invest in funds. So that… is an important distinguisher that's easy for both sides to discern early on. 
As far as… when we talk about senior housing in particular, I do think it's still. It's not the same as multifamily where starting with the crash in 2008, so many family offices got into multifamily real estate investing and it's been actually incredible to see the growth of multifamily, in large part because of family office activity along with the institutional fund activity in this space. 
I think multifamily was an easier area for family offices to enter because it is more of a passive investment. It is general housing. There was a macro trend, favorably inclined to value growth. And we had, we had a major bubble burst in single family homes in '08. So all of those factors meant family offices could access that space much easier. And a lot of them stayed passive. So they were investors in this space and, but in like they were the LP and then some did go active. So they were the ones building the expertise in house to develop multifamily or go out and find deals. 
Senior housing, I don't see it getting to that level because it is specialized, it requires operational skill and knowledge. You… it is not a passive investment. For sure for the investment manager. It can still be for your LPs, but there has to be someone with that owner hat, that owner mindset. Who is actively engaged and ensuring that performance for not just the investment, but also for the residents is taken into consideration. 
So it is possible and it is growing, but I don't see it doing the same as multifamily.  

Lynn Jerath: And that's, if I may, that's actually something that Citrine can provide because we are an investment manager. We think of ourselves, we are the owner's representative, we're the owner. And so we are not an operator. We are not the ones on the ground running the communities. But what we do is we go deep and vet operators, vet the community, the overarching geography of each community, and then the communities themselves. 
So we provide that expertise and service to our LPs, and I think that is a way to have that… function for a family office will help them tremendously in getting comfortable because we do have relationships with family offices, and then we have the senior housing knowledge and expertise. 
So we serve as not just a bridge, but as a… insurance and the one providing the ownership management. And a lot of times I hear not just family offices, but private equity funds as well, real estate funds who say they're interested in this space, but they got burned. They say they got burned in the past. And I think it's not anyone's fault from the past, but being a operator of senior housing doesn't just automatically mean that you have the investment and acquisitions and transaction experience that the investor may be looking for or needs. Because there's, there are different skill sets.  

Lisa McCracken: What advice would you give family offices that may be looking to do an investment in senior housing? If a family office or one of their advisors were listening to this what would be your sort of elevator speech to them?  

Lynn Jerath: Yep. Yes. I would start with NIC. NIC has been the gold standard in bringing people in the industry together and for providing the data and information about the sector almost on a daily basis. NIC has information coming out that anyone who wants to read can access. Of course, you have your paid subscriptions as well, but there, there's a lot of information that anyone can get on NIC's website and I think that… is a great place to start… 
And then I'd say instead of thinking about it like… 'cause I hear this a lot. Oh I'm intrigued, but I just don't know how to get there. I think… understanding the architecture of the senior housing space is fundamental—who does what (investment managers, operators, large REITs), the asset types (assisted living vs memory care vs independent living, and levels within those). Maybe an investor says, I don't think I can jump into skilled nursing, but independent living or active adult may be totally reasonable… a great entry point.  

Lisa McCracken: Family offices are often called patient capital. Do you agree, and what’s a typical horizon?  

Lynn Jerath: I wouldn't characterize it as patient. I would characterize it more as flexible. So again, going back to no one family office has to look like any other one. So there may be some that are saying, yes, we wanna make generational investments in senior housing, and we wanna own these communities for 20 plus years. 
There are also those that say… a three to seven year hold is where we're at. Maybe a hybrid: start three to five or three to seven, make sure the investment works, then stay longer if attractive cash flow and real estate tax benefits (depreciation/accelerated depreciation) are there. So I, I don't think they're all long term, but it… yeah.  

Lisa McCracken: We’ve talked a lot about the real estate. What about operating companies—do you see openness to invest in those platforms too?  

Lynn Jerath: I see that very selectively. I don't think that is the bulk of the capital interest. There are strategic opportunities—for example, an operator that has, I don't know, 10 to 40 assets that they're looking to recapitalize and maybe a family office comes in as fresh new capital and also takes an ownership stake in the operating company. But… not common—it would have to be a bespoke situation.  

Lisa McCracken: Final question—outlook for senior housing? Are you bullish? Any threats or concerns? Looking into the next couple years.  

Lynn Jerath: No, we're, we are definitely bullish. COVID was a really difficult time, the good news is we're… in our rear view mirror now. And as NIC reports, occupancy trends have been really strong. Interest rates are higher… which mutes new construction and supply. Demand has continued to rise, we're seeing less supply, which makes it very attractive for owners of existing communities to outperform. 
The things to look out for this is an operationally intensive space—you don't wanna go into it without deep knowledge. You don't wanna be a senior housing tourist. If you wanna invest in this space, come and join us. You've gotta live in it… study it… get to know the players… ground yourself. It's not one to just jump in and out of… But with that said… it's an incredible space and we're serving such an important need.  

Lisa McCracken: Without a doubt. Well, Lynn, I appreciate your time here today. We look forward to seeing you at the NIC Fall conference in September, you can visit the NIC website, for this podcast and additional ones. Thanks, Lynn.