To be more specific , the National Council of Real Estate Investment Fiduciaries ( NCREIF ) 2018 property index results revealed that over a tenyear period , returns for senior housing averaged 10.2 %. This average is well above the returns from overall property index ( 6.09 %) and apartments ( 6.10 %).
Regarding appreciation , senior housing investments produced 3.73 % of total returns compared to 0.54 % for overall property index and 1.03 % for apartments .
Another way senior housing outpaces other sectors is total income returns . Senior housing investing produced total income returns of 6.61 % while property index and apartments produced 5.53 % and 5.20 %, respectively .
Senior Housing as an Alternate Investment
According to the CBRE , over the past 13 years , the market share of alternative investments has more than doubled . More recently , in the past five years , annual investments in specialty properties have made up 12 % of all CRE investments . This accounts for approximately $ 59 billion in yearly transactions .
Below , we have listed the eight major alternative investment sectors along with the percent share of all alternative investments and average annual investment volume from the years 20142019 .
1 . Seniors housing and care
31.3 %/$ 17.2B 2 . Medical office 22.1 %/$ 12.2B 3 . Student housing 13.3 %/$ 7.3B 4 . Life sciences 11.8 %/$ 6.5B 5 . Selfstorage 9.0 %/$ 5.0B 6 . Manufactured housing communities 6.3 %/$ 3.5B 7 . Active adult and 55 + communities 3.2 %/$ 1.7B 8 . Data centers 3.1 %/$ 1.7B
Benefits of Alternative Investments
The key positives of investing in alternative investment sectors can be narrowed into five main benefits :
1 . The effects of cap rate compression from traditional assets can be offset by yield premium and higher cap rates of specialty investments .
Image by Tumisu from Pixabay
" Whether you are a seasoned investor looking to diversify or just getting started investing , senior housing should be at the top of your list ."
2 . Market demand for alternative investments is rising due to fundamental structural changes in business , technology , demographics , tenant experience , and Environmental Social and Governance ( ESG ) criteria .
3 . Product availability is rising as developers rise to meet the demands of investors on national and international levels .
4 . Alternative investments offer a great opportunity for portfolio diversification for investors currently holding traditional assets .
5 . Alternative investments are improving in transparency of pricing , operations , and market performance , making such investments more appealing to investors .
Bottom Line
Whether you are a seasoned investor looking to diversify or just getting started investing , senior housing should be at the top of your list . The demand is undeniable as our Baby Boomers continue to age , providing a great opportunity for growth and development . Senior housing is a low risk investment with potential to provide exceptionally high returns .
If you ’ ve ever been interested in learning more about investing into senior housing , please visit SeniorLivingInvesting . Co or email us directly at :
Vinney @ VinneyChopra . com .
74