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CBRE Survey Finds Investors Appetite Remains Healthy for Senior Housing
The appetite for seniors housing acquisitions remains strong, with nearly two-thirds of investors planning to increase the size of their portfolios over the next 12 months, according to research by CBRE. In the Los Angeles-based company’s latest U.S. Seniors Housing & Care Investor Survey, it found investors are most interested in lifestyle-focused seniors housing.
CBRE’s head of multifamily research, Jeanette Rice, says, “Seniors housing acquisitions momentum will continue in the second half of 2018, and will likely increase, especially if the sentiment reflected in the survey materializes. Despite the increased capital-market and operational headwinds, investor interest remains robust and a lack of available product to buy should keep pricing strong.”
Independent living (34%) was identified as the best opportunity for investment, followed by assisted living (23%). The active-adult segment (19%) is also attracting considerable interest, up from 13% last year. Memory care properties continue to lose ground, with investors now seeing the least opportunity for this property type, likely due to the overbuilding in recent years.
As worries about the availability and cost of labor mount nationally, investors see ‘increased property-level operating and development costs’ (36%) as their biggest concern for a consecutive year.
Capitalization rates rose in nearly all categories, reversing a trend from prior surveys.
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