US Senior Housing and Care Investor Survey H1 2025

This 16th edition of CBRE’s Senior Housing & Care Investor Survey, conducted in late April 2025, polled the same group of senior housing real estate professionals and investors as our last survey in October 2024 and had a 94% response rate.

A clear majority of respondents reported either no change or a decrease in capitalization rates from the prior survey and more than 63% said they expect cap rates to compress over the next 12 months.

Figure 1: Survey Respondent Categories (%)

• Fifty-nine percent of survey respondents reported no change in senior housing cap rates from the prior survey.
• Based on total responses, the average senior housing cap rate fell by 12 basis points (bps) over the past six months.
• Skilled Nursing (SN) cap rates decreased by 10 bps on average between October and April, after decreasing by 7 bps over the previous six months.
• The average cap rate for Active-Adult (AA) communities decreased by 20 bps on average between October and April, the segment with the greatest change from the prior survey.
• Independent Living (IL) and Assisted Living (AL) cap rates fell by 15 and 16 bps, respectively., Memory Care (MC) was the only segment with increased cap rates, up by 8 bps on average from the prior survey.
• For AA, IL, AL and MC facilities, 56.5% of survey respondents said they expect rental rate increases of 3% to 7% over the next 12 months, up from 48.0% of respondents in the prior survey.
• No respondents reported underwriting rent growth above 7%, compared with the 12% of respondents who did in the April 2024 survey.

The average cap rate for Core Market Class A Assisted Living facilities fell the most, down by 14 bps to 7.0%, while average cap rates for Non-Core Market Active Adult and Assisted Living facilities both fell by 13 bps to 6.4% and 7.4%, respectively.

Free-standing Memory Care was the only segment with increased cap rates, up by 8 bps to 9.6% on average.

Figure 2: Senior Housing & Care Capitalization Rates

Figure 3: Capitalization Rate Change from Prior Survey

Cap rate spreads between asset classes were essentially unchanged at +3 bps.

The average spread between core and non-core assets remained at 53 bps

Figure 4: Senior Housing & Care Capitalization Rate Spreads; Investment Class & Location

Figure 5a: Senior Housing & Care — Historical Capitalization Rate Trends

Figure 5b: Skilled Nursing

Figure 5c: CCRC/LPC

A majority of survey respondents expect rent growth of between 3% and 7% over the next 12 months. No respondents expect rent decreases for any segment, while the share of respondents expecting no change in rental rates fell slightly from our prior survey to 18.3%. As in October, no respondents reported underwriting rent growth of more than 7%.

CBRE forecasts annual rent growth of more than 5% over the next 36 months. Cost feasible rent is approximately 20% above market rent at existing competitive alternatives in most core markets.

According to senior housing data provider NIC MAP, the sector will need to add more than 250,000 units through 2027 to accommodate rising demand from an aging population, compared with only 21,750 units under construction as of Q1 2025.

Top-quality independent living communities delivered between 2018 and 2021 stand to benefit the most, as any new construction will likely offer fewer amenities and lower-quality interior finishes due to rising costs.

Figure 6: 2025 Rent Growth Expectations

Nearly two-thirds of respondents expect senior housing cap rates to decrease over the next 12 months, while only 15.8% expect an increase. Just over 21% expect no change.

Figure 7: What is your 12-Month Outlook for Senior Housing Cap Rates