Seniors housing poised for a successful 2025 boosted by surge in investment volumes and exceptional rent growth

CHICAGO, Feb. 20, 2025 – The seniors housing sector ended 2024 with the highest investment volume since Q2 2022, buoyed by increased confidence in the capital markets and strong underlying fundamentals within the asset class. These trends are anticipated to continue through 2025, as highlighted in JLL’s eighth annual Seniors Housing and Care Investor Survey and Trends Outlook, which surveyed some of the most influential market participants in the sector to garner insights into the current market sentiment from industry leaders and to provide expectations for the year ahead.

Of the investors surveyed for the report, 78% of respondents indicated they would increase their investment exposure to seniors housing in 2025, which is up 24% from 2024. Assisted living remained the most sought-after investment pick with 50% of investors seeing it as the biggest investment opportunity over the next 12 months, up 22% from 2024. Independent living and skilled nursing followed behind, with active adult rounding out the list of choice investments.

Additional key themes addressed in the report include:

Investment Volumes: Rolling four-quarter volume increased to the highest level since Q2 2022, as strong transactions flow materialized in the middle of 2024.

Capitalization Rates: Some 57% of respondents expect seniors housing cap rates to compress over the next 12 months, compared to just 17% of respondents in JLL’s prior survey.

Occupancy Recovery: Outside of select major West Coast cities, most markets have fully recovered to their pre-pandemic occupancy levels, with average occupancy across secondary markets near all-time highs.

Construction and Demand: Development of new senior housing facilities is at its lowest levels in over 16 years, while demand has picked up significantly. Subsequently, rent growth is amongst the highest of all CRE sectors.

Demographic Trends: Demographics in the United States represent a significant tailwind for the seniors housing sector, with the 80+ age cohort set to grow 36% over the next 10 years.

Investor Confidence: While investor sentiment continues to be impacted by variable bond markets, most industry participants anticipate market conditions to improve, leading to stable or declining cap rates over the next 12 months. The majority of investors surveyed are looking to increase their exposure to the seniors housing sector in 2025, with independent and assisted living facilities the most targeted investment segment.

“The alternative sectors of the commercial real estate industry continue to attract new entrants as investors look to diversify their portfolios with recession resilient assets like seniors housing,” said Bryan J. Lockard, Executive Managing Director and Head of Healthcare & Alternative Real Estate at JLL Value and Risk Advisory. “There are significant tailwinds in place for seniors housing at the moment and with such a limited new development pipeline, rent growth as well as investment returns look to be healthy for quite some time.”

JLL Value and Risk Advisory is the essential guide to the changing face of real estate values and risk.  Our expert value and risk specialists are here to help investors and lenders identify, mitigate and monitor risk, and optimize real estate values across all sectors and geographies.   More than 2,400 experts in 35 countries analyze $3.6 trillion of real estate, delivering actionable risk and value insights, so investors and lenders stay ahead in the market. A global community of sector-based specialists, the team delivers tailored client solutions for your real estate and business asset interests, giving an accurate picture of value and risk across any opportunity.

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