June 21, 2017
Investors can’t get enough of seniors housing properties, according to CBRE’s U.S. Seniors Housing & Care Investor Survey, which polls seniors housing investors, developers, lenders, and brokers throughout the nation. Nearly 60% of respondents expect to add to their portfolios in 2017, compared with 47% a year ago.
“Investor interest in the seniors housing sector is clearly rising,” said Jeanette Rice, head of multifamily research, Americas, CBRE. “Favorable investment yields, the need-driven component of demand, and the aging population storyline will continue to drive investment into the sector in 2017 and entrench its attractiveness to investors.”
Investors are starting to target properties on the life-style focused spectrum of seniors housing, according to the survey. For example, 40% of survey respondents ranked independent living assets as the most promising, compared to 31% a year ago. They also like age-restricted properties. In contrast, assisted living facilities and memory care properties are losing ground with investors, due to overbuilding of the segment over the past few years.
Although Rice expects valuations to remain stable this year, select markets are facing an oversupply of seniors housing due to record-setting construction levels. To that end, investors were most concerned about increased construction in the sector, followed by rising interest rates and property-level operations.
Despite these concerns, Rice contends that the seniors housing sector has a strong long-term outlook. “Fundamentals indicate a need for more supply in years to come,” she noted.
For questions, comments or concerns, please contact Jennifer Duell Popovec