For the primary time in almost twenty years, senior residing occupancy is outperforming different industrial actual property (CRE) sectors, in keeping with the Nationwide Funding Heart for Seniors Housing and Care (NIC).
Final 12 months, NIC launched its SHARK report that supplied insights into demographic-driven demand, new building of communities and outlook on occupancy.
Within the first quarter of 2025, common senior residing business occupancy reached 87.4%. That matches with NIC projections that common senior residing occupancy will go peak ranges not seen since 2008.
Senior residing occupancy development within the business’s prime 99 major and secondary markets exceeded that of different sectors, together with residence, strip malls, workplace and industrial properties, in keeping with NIC Senior Principal Omar Zahraoui. Whereas he famous that might draw extra traders to the house, labor, immigration coverage and tariffs proceed to complicate operations and new growth.
In a 2024 City Land Institute ballot, senior housing ranked behind solely information facilities in projected risk-adjusted returns by 2028.
The variety of occupied senior residing items is constant to develop with no indicators of a requirement cliff, “however the market is getting into a brand new part,” Zahraoui wrote.
“By 2026, stronger demand, mixed with a possible undersupply of latest stock, is anticipated to drive upward stress on pricing, and builders might want to take a considerate method aligning rising growth prices with reasonably priced lease,” he wrote.
For each 27 items occupied, 10 are being constructed throughout 99 major and secondary markets tracked by NIC, which is nicely above the road wanted to proceed occupancy will increase no matter care sort.
By the top of subsequent 12 months, senior residing occupancy in “most areas” is projected to surpass peak ranges final seen in 2008, with the North Central, Mountain and Southwest areas being the “closest” to succeed in 2008 historic census ranges.
Occupied unit development continued at a “measured and disciplined” tempo with no indication of a “demand cliff” sooner or later, Zahraoui wrote. However new initiatives will take years to open and the sturdy absorption seen within the final two years exhibits a “clear want” for brand new growth initiatives.
