Intelligent Investment
Senior Housing: Big Opportunities in the Golden Years
June 12, 2024 5 Minute Watch
Summary
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Executive Managing Director
Senior Vice President
- Demographics driving investor interest
Roughly 10,000 new people reach age 65 every day in U.S. The Senior Housing resident profile—aged 80 and up—is growing at a rate four times the average population growth—a tailwind that will persist for the next two decades. - Fundamentals outperform other sectors
Occupancy is expected to fully recover to pre-pandemic levels by the end of this year. Healthy demand for Senior Housing living is driving strong rent growth. While down from 7% to 12% annually for the past two years, rents are expected to increase by 5% to 7% in 2024—with further growth likely due to a low supply pipeline. - Cap rates vary by level of acuity in Senior Housing
For types of Senior Housing with lighter levels of acuity (e.g. Active Adult), cap rates are very similar to traditional multifamily. For types with higher levels of acuity (e.g. Assisted Living and Memory Care), cap rates can be as much as 200 basis points more than typical multifamily. - A strong case for Senior Housing investment
Senior Housing provides an interesting investment thesis by combining strong demand tailwinds, a limited supply pipeline, positive leverage and prices well below replacement cost.
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This 14th edition of CBRE’s Senior Housing & Care Investor Survey, conducted in April 2024, polled the same group of senior housing real estate professional...