Senior Housing Shows Signs of Improvement in Market
The seniors housing sector is increasingly capturing investor interest as it gains recognition as a standalone asset class in the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index. This significant development highlights seniors housing’s growing prominence, moving it from the “other” category to join traditional sectors like office, retail, industrial, and apartment. The inclusion in the NCREIF index enhances transparency and positions the sector more favorably for institutional investors, who are now more actively seeking opportunities in seniors housing due to positive demographic trends and attractive yield prospects.
Market conditions are favorable, with robust rental rate growth and reduced construction starts contributing to a surge in investment activity. New and seasoned investors are drawn to the sector by its strong long-term growth potential, especially with the 75-plus demographic expected to nearly double by 2045. The current environment is marked by increased bidding activity and healthy yield premiums, indicating a bright future for seniors housing despite short-term challenges in new construction. As interest rates potentially decrease, 2025 is expected to see heightened market activity, offering ample opportunities for both buyers and sellers in this expanding sector.
