Senior Housing and Assisted Living Investors
Are senior housing, assisted living properties, and senior care businesses a great investment in 2023?
Interesting Facts
- In 2023, there are an estimated 28 million Americans over the age of 75 and 9.6 million over 85, a common move-in age of a resident to seniors housing.
- It’s not until 2031 that the oldest baby boomer will have turned 85—effectively opening the proverbial floodgates for senior housing investments.
- 2 million Americans will live in senior care communities by 2030, doubling from 2016.
- By 2050, it is estimated that over a fifth of the population in the United States will be 65 years or older, compared to only 15.6 percent today.
SENIOR HOUSING IS OUR BUSINESS
Haven Senior Investments provides a skilled analysis of potential senior housing for investors. Using investment analysis technology, coupled with market expertise and investment experience, we help investors assess the viability of an investment as well as evaluate value-add opportunities to enhance returns. This successful combination gives us and our clients a strategic edge.
Senior Housing Capitalization Rates 2023
State of the Senior Housing Industry
For the senior care investor the senior housing market benefits from a massive demographic groundswell. Despite the overwhelming growth in the senior population, new supply growth has remained well below the highs of 2006 and early 2008, while stabilized occupancy has continued to increase.
As such, we believe that the acquisition, renovation, and development of Senior Housing and assisted living facilities comprise one of the very best risk-adjusted opportunities in both commercial real estate and general domestic investment. That said, it is not an easy space for passive investment. While the coming years will see many new entrants into space, senior housing is unique compared to more conventional forms of real estate by being far more operationally complex and demanding from a regulatory purview. In sum, despite the favorable population momentum that underpins the senior living sector, the successful execution of the strategy requires an experienced and dedicated investment team.
SENIOR HOUSING IS A RECESSION RESILIENT ASSET CLASS
A major benefit for investors in the senior housing space is the resiliency of this sector of the commercial market. A key component of the senior housing market’s success is its lack of reliance on an economic or real estate environment. Senior housing has been the number one performing commercial real estate sector for the last ten years. This includes the period encompassing the 2007 capital market collapse, in which returns among other commercial sectors fell as much as 20%.
WHERE ARE SENIOR HOUSING INVESTMENTS HEADED?
The senior housing and care sector is generating buzz, with more real estate investors hopping on board. According to the PwC’s Emerging Trends in Real Estate 2022 Report, investing in senior housing is, once again, one of the best bets for real estate investment and development for years to come. According to the survey, investors are now more interested in independent living units, assisted living facilities, nursing homes, and long-term care facilities. These senior housing real estate properties present profitable investment opportunities for investors in 2022.
In 2021, there were 10.5 million Americans aged 82 and older; by 2025, that is projected to grow to 12 million, and by 2030 to 15 million, according to the U.S. Census Bureau.
SENIORS HOUSING AS AN INVESTMENT
Over the last five years, annual investment volume in specialty properties has accounted for 12% of all CRE investments, representing about $59 billion in annual transactions.
These are the eight main specialty investment sectors, listed by market share of all alternative investments and the annual average investment volume from 2014 to mid-year 2019:
- Seniors housing and care – 31.3% share of all alternative investments / $17.2B annual average transaction volume
- Medical office – 22.1% / $12.2B
- Student housing – 13.3% / $7.3B
- Life sciences – 11.8% / $6.5B
- Self-storage – 9.0% / $5.0B
- Manufactured housing communities – 6.3% / $3.5B
- 55+/Active adult communities – 3.2% / $1.7B
- Data centers – 3.1% / $1.7B
Biggest Opportunity for Senior Housing Investment (%) 2023
The Bottom Line
Whether you’re looking for ways to diversify your investment portfolio or you’re just getting started with real estate investing in the coming year, consider investing in senior housing. There will always be demand for senior real estate properties as American Baby Boomers age and there’s room for growth and new development due to the shortage in supply. Not only that but it’s also a low-risk investment that you can always count on to yield high returns.
Are you looking for senior housing or assisted living capital options?
For a description of all senior housing loan programs please visit our Loan Programs page.
Complete a market report before you make any decisions regarding buying or developing senior housing in your chosen location.
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We are always ready to discuss commercial grade senior housing and assisted living investment opportunities. Schedule some time with us by filling out the form below.
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