" While it is still not keeping pace with the aging demographic , reports do indicate that senior housing development is increasing . The 2020 Emerging Trends Report concluded that senior housing is the top commodity for the development of residential properties and the 3rd prospect for development in commercial and multifamily properties ."
No industry is perfect , and like others , senior housing is impacted by inflation and an inability to sell . However , these impacts tend to be moderate . The benefits of social security payments to seniors and the needdriven demand for senior housing provide substantial backing to senior housing . With these benefits in mind , the senior housing industry is protected from traditional economic setbacks that take down other commercial real estate investments .
Finally , national operators have successfully maintained occupancy rates of 88 % or higher in senior housing , even in markets that have reached temporary saturation .
# 2 . New Senior Housing Development and Supply
The current inventory for senior housing is relatively outdated with 58 % of the current housing units over 17 years old and 32 % over 25 years old . As with any property , aging of these units only worsens with time . The existing units will become progressively more and more outdated as care amenities continue to improve , tastes evolve , and new regulations come to light . Additionally , as we ’ ve discussed previously , construction of senior housing units is not keeping pace with the aging senior demographic . These trends present both a challenge and an opportunity for real estate investors looking into the senior housing sector .
While it is still not keeping pace with the aging demographic , reports
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do indicate that senior housing development is increasing . The 2020 Emerging Trends Report concluded that senior housing is the top commodity for the development of residential properties and the 3rd prospect for development in commercial and multifamily properties .
# 3 . A RecessionResilient Investment
When compared to other traditional real estate sectors , senior housing is exceptionally resilient . While it has its own business cycle , the cycle in senior housing is far more steady than other sectors and less affected by traditional economic changes . This is largely due to the key benefits of senior housing already discussed .
Additionally , the needbased demand for senior housing is an undeniable benefit . There will always be a need for longterm , quality medical and health care facilities for our seniors , regardless of economic circumstances . These characteristics allow senior housing investments to thrive while other industries suffer during recession times among other economic pitfalls .
Traditionally , the senior housing sector has proved itself to be resilient to difficult economic times . This should reassure you as an investor that you can rest easy with a senior housing investment . It is a lowrisk and reliable investment with the potential for phenomenal returns .
# 4 . Historic Investment Performance
Historically , senior housing investing has a track record of success . When compared to other major real estate investments , senior housing generally has increased income stream , appreciation , and total return on investment .
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