Impartial dwelling and assisted dwelling proceed to cleared the path for future senior housing funding, with a latest survey displaying a 24% improve in optimistic funding sentiment for the sector from 2024.
That’s in keeping with JLL Capital Markets’ eighth version of the Senior Housing and Care Investor Survey and Traits report.
A complete of 78% of traders mentioned they plan to extend their senior dwelling portfolios this yr. Favorable demographic developments, improved sector occupancy and up to date bustling transaction exercise coincide with the survey’s rosier findings.
“We count on a giant yr from a transaction standpoint and count on an excellent larger yr if rates of interest determine to play alongside,” Bryan Lockard, govt managing director and head of healthcare and different actual property at JLL Worth and Threat Advisory, advised Senior Housing Information on Friday.
Assisted dwelling leads the pack throughout the continuum for future funding as 50% of traders mentioned it was the highest alternative over the subsequent 12 months, up 22% from 2024.
Competitors for “high quality belongings might intensify” inside the assisted dwelling sector, Lockard famous.
“It was not that way back that we had been all saying, ‘Survive to ’25,’ and we’re right here now,” Lockard advised SHN. “Our expectations are for a really energetic yr and never simply from a distressed gross sales level.”
Impartial dwelling, expert nursing and energetic grownup observe shut behind assisted dwelling for future funding, and JLL reported that the senior dwelling sector wrapped up 2024 with the best funding quantity because the second quarter of 2022.
That was pushed by elevated investor confidence in capital markets and powerful underlying fundementals—spanning low growth to favorable demographic developments oft-touted throughout the trade.
These with dry powder to fireside are executing on senior dwelling offers, with one latest instance being Welltower (NYSE: WELL). The true property funding belief executed on a $2 billion funding pipeline in 45 days throughout 27 transactions, largely in senior dwelling.
By way of cap charges,57% of respondents count on them to compress over the subsequent 12 months, contrasted with 17% of respondents tallied in 2024.
“This implies the market has reached its backside and we must always see continued enchancment over the subsequent 12 months,” Lockard advised SHN.
This comes as “most markets” have recovered to pre-pandemic occupancy, and the typical occupancy price in secondary markets are “close to all-time highs,” the report notes. That’s led senior dwelling operators to push past census and take intention at enhancing internet working revenue and margin restoration in 2025.
However investor sentiment continues to be subdued by “variable” bond markets and growth for brand spanking new senior housing is at its lowest level in “over 16 years,” and a number of the nation’s largest operators are shying away from new initiatives in the meanwhile.
However growth exercise is ongoing for choose corporations, that are selecting to foot extra danger within the short-term to seize incoming demand and be forward of an eventual building turnaround.
Regardless of the potential menace of federal well being care coverage adjustments sooner or later, by adjustments enacted by the Facilities for Medicare and Medicaid Companies (CMS) or different elements of the administration of U.S. President Donald Trump, Lockard mentioned this uncertainty doesn’t seem to dissuade potential future traders, noting they might have “factored in such dangers.”
He pointed to the 14% curiosity by traders to extend investments in expert nursing final yr, saying the “consistency means that regulatory considerations haven’t considerably altered perceptions” in high-acuity settings.
“General, the survey suggests the strengths outweigh the dangers, for my part,” Lockard mentioned.
