Senior Housing and Assisted Living Investors
The most important question to ask when considering investing in seniors housing and assisted living in 2024 is:
“What are the current and projected demographic trends, and how do they align with the current and future location and services of the seniors housing and assisted living facilities?”
Interesting Facts
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- The demand for senior housing is growing. The average annual population growth in the 80-year-old plus cohort will be between 700,000 and 800,000 by 2030, a more than 24% growth rate. Fueling that is the leading edge of baby boomers who turn 80 in 2026. They estimate about 18 million of 65-plus aged population increase between 2010 and 2030. The 65-year-olds are estimated to live an additional 20 years. And yet, there’s not enough senior housing. U.S. construction starts are at their lowest since 2009.
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- Senior housing is a recession-resistant investment. During economic downturns, people often choose to downsize their homes and move into senior housing. This is because senior housing can provide a more affordable and convenient option for seniors who are no longer able to live independently.
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- Senior housing is a needs-based investment. The demand for senior housing is not dependent on economic conditions. Seniors will always need housing, regardless of the state of the economy. This makes senior housing a more stable investment than other types of real estate.
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- The returns on senior housing investments can be attractive. The returns on senior housing investments can be attractive, especially in the long term. According to a 2019 report by the National Investment Center for Seniors Housing & Care, the average annual return on senior housing investments over the past 10 years was 11.4%.
SENIOR HOUSING IS OUR BUSINESS
At HSI, we utilize cutting-edge investment analysis technology to thoroughly evaluate senior housing projects. With our deep market knowledge and insights, we go beyond surface-level evaluations. Our assessments delve into crucial factors such as market trends, demographics, financial projections, and risk analysis.
Backed by seasoned professionals with real-world experience in the senior housing sector, our recommendations are rooted in industry insights. We identify untapped opportunities for growth and hidden value that others may miss.
Partnering with HSI gives you a strategic advantage. We help you understand the true potential of each investment, identify areas for value addition, and formulate strategies for enhanced returns. Investing in senior housing requires expertise and access to cutting-edge tools. With HSI, you gain both. Trust us to guide you toward lucrative opportunities and maximize your portfolio’s potential.
Senior Housing Capitalization Rates 2024
State of the Senior Housing Industry
Welcome to the thriving world of the senior housing industry! As a senior care investor, you have the incredible advantage of riding the wave of a massive demographic groundswell. The growth in the senior population is truly overwhelming, and the best part is that the new supply growth in the senior housing market has remained well below the peaks seen in 2006 and early 2008. On top of that, stabilized occupancy rates have been consistently on the rise.
At Haven Senior Investments (HSI), we firmly believe that from 2023-2040 the acquisition, renovation, and development of senior housing and assisted living facilities present one of the most exceptional risk-adjusted opportunities in both commercial real estate and general domestic investment. It’s an industry that holds immense potential for those who are willing to take an active and passive investment role. Please be aware that it stands apart from more conventional forms of real estate due to its unique operational complexity and rigorous regulatory requirements.
As we look ahead, we anticipate a surge of new entrants into the senior housing market. However, success in this field requires more than just being part of the crowd. It demands an experienced and dedicated investment team that can navigate the intricacies of this specialized sector.
With HSI, you’ll find that team—a group of seasoned professionals who have the knowledge, experience, and dedication to drive your senior housing investments to new heights. We understand the significance of the favorable population momentum that underpins the senior living sector, and we’re here to guide you towards success.
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 (%) 2024
Be aware that with the increase in interest rates in 2023 the capitalization rate for Active Adult is below borrowing costs. That may change in 2024. Capitalization rates for Assisted Living, Memory Care, and Skilled Nursing facilities that are transacting are above the cost of debt today.
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.
Our Services
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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.
If you are looking to passively invest in senior housing opportunities or a Senior Living Real Estate Fund, please register on our Investment Portal.
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