Housing designed specifically for senior citizens will provide an opportunity for investors in the coming years, according to 1031 Crowdfunding, an alternative investment platform based in Irvine, Calif., that is trying to capitalize on the anticipated boom.

Officials at the firm are seeking to take advantage of this opportunity and have launched a fund that targets this niche market by investing in real estate assets for senior residential living space, the firm announced recently.

The new fund, called 1031CF Bridge Fund III, joins 1031 Crowdfunding’s current holdings of 14 real estate properties and 15 senior housing facilities.

The fund requires a $25,000 minimum investment, which matures in 2030. Seven percent of the interest on the notes will be paid currently. “The remaining 8% of interest will accrue, but not compound, and be payable on maturity or earlier. Notes are speculative and involve significant risk. An investment should only be made by investors who are able to bear the risk of and to withstand total loss of principal,” the firm’s website warns.

“The senior housing asset class presents unique opportunities to address the increasing demand for these facilities as the baby boomer generation, the second largest in the U.S., ages,” Edward Fernandez, president and CEO of 1031 CF Properties, said in an interview.

The name of the firm refers to the IRS code that allows tax deferred investments in real estate for accredited investors. Internal Revenue Code 1031 allows an investor to postpone paying tax on the gain of the sale of real property, such as real estate, as long as the seller reinvests the proceeds into a property that is similar. This program is structured so the real estate firms which own the buildings can take advantage of tax deferral.

The term “crowdfunding” in the name is not what is usually thought of as “crowdfunding.” “At the end of the day, crowdfunding is a group of people coming together and participating in an opportunity, whether it’s a song someone is trying to produce, or a loan someone needs to obtain, or investment in someone’s startup business,” Fernandez said. “In this case, crowdfunding is a crowd of people coming together and funding projects that qualify for a 1031 exchange.”

1031 CF Properties is the wholesale side of the business where the firm’s products are distributed to the financial services industry, “so that financial advisors can utilize our products and present them to their clients,” Fernandez explained. 1031 Crowdfunding is the retail side of the business where investors can obtain products on a retail level. The firm encourages investors to devote a portion of their portfolios to alternatives, including real estate investment trusts (REITs).

“Advisors need to balance clients’ portfolios by devoting as much as 20% of the assets to alternatives,” including vehicles like those accessed through 1031 Crowdfunding, Fernandez said.

In particular, Bridge Fund III will focus on investing in undercapitalized, or otherwise underperforming, real estate assets in the senior housing space, concentrating on improving the operating efficiency of the properties, the firm said in announcing the launch.

“As the senior housing market continues to evolve, we are committed to delivering exceptional investment opportunities while making a positive impact on the communities we serve,” Fernandez said.

The new fund represents a strategic move by 1031 CF Properties to capitalize on the growing demand for assisted living and memory care facilities that are needed to accommodate the aging population in the United States and around the world, 1031 Crowdfunding said in making the announcement.