Research
Seniors Housing & Care Investor Survey and Trends Outlook
Transaction volume picks up two years after initial industry disruptions.
March 31, 2022
Contributors:
- Brian Chandler
- Bryan Lockard
- Jacob Sandler
- Amber Schiada
- Maddie Holmes
Our investor survey indicated 80% of respondents believe we have endured the worst of the pandemic and expect market fundamentals to improve, which is a vast improvement from the only 48% who had the same sentiment this time last year. Coupled with that, 76% of respondents expect their exposure to Seniors Housing to increase over the next year. The Seniors Housing sector has moved into the recovery phase since the pandemic-related disruption, backed by strong long-term demand and increased investor interest.
Report highlights:
Capital markets
- Interest in Seniors Housing swells as investors look to alternative assets for growth and resiliency.
- Q1 2021 saw an increase in Seniors Housing and nursing care transaction volume for the first quarter since the onset of the COVID-19 pandemic, and it was up 61% in Q4 2021.
- Capitalization-rate compression and price increases are expected with rising costs in Seniors Housing.
- Rising interest rates and inflation remain top of mind for many investors.
Market fundamentals
- Market fundamentals have bounced back as restrictions lessen and demand tailwinds persevere.
- Seniors Housing occupancy rates have rebounded from the lowest points seen due to the disruption from the pandemic.
- The pace of rent growth in Seniors Housing accelerated through 2021 and is expected to continue in 2022.
- Primary and Sun Belt markets are experiencing the highest concentration of new construction.
Investor sentiment
- Market participants grow more bullish on Seniors Housing and Care investment, with 76% of respondents indicating that they intend to increase their exposure to the sector in 2022.
- 80% of respondents indicated that we have endured the worst of the pandemic and expect market fundamentals to improve. 11% of respondents say it’s still too early to tell, while another 9% expect to see a decline in property valuations and an increase in loan delinquencies over the next 12 months.
- Most respondents indicated they expect Seniors Housing capitalization rates to remain the same throughout 2022, at 47%. Another 38% expect them to decrease.
