Report: senior housing one of the most sought-after investment opportunities

Transaction volumes jumped 61% over the first quarter, marking the highest level since 2019. Even the nursing care investment niche – the most operationally challenged segment – posted a 24% year-over-year increase in transaction volumes.

Unit pricing for senior housing has also shown signs of recovery. The average senior housing price per unit was just under $160,000 at the end of 2021, 9% higher compared to the first quarter of 2021 but still below the pre-pandemic peak of approximately $180,000 per unit.

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“We are seeing demand improve each quarter, so the long-term opportunity is quite attractive for institutional capital looking to diversify their portfolios or hedge against riskier investment classes,” added JLL managing director Bryan Lockard. “Additionally, capital for commercial real estate investment continues to accelerate to all-time highs, reaching $243.7 billion in February 2022.”

According to JLL, the over-80 cohort are the main drivers of the demand for senior housing products. However, the industry started to shift to a new 10-year investment cycle at the beginning of 2022 as a large population of baby boomers moved into retirement communities. This surge of new residents entering senior housing, also dubbed the “silver tsunami,” is expected to create a supply shortage and increase demand.