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Where Are Senior Housing Investments Moving ?
While still a relatively new phenomenon , the senior housing sector is generating talk among real estate investors . The 2021 report by PwC on “ Emerging Trends in Real Estate ” named senior housing investing as one of the best for years to come . The survey results showed a growing interest from investors in independent living , assisted living , nursing homes , and longterm care facilities . These opportunities will only continue to increase as we move into the year 2021 .
A survey from 2019 by the CBRE titled “ U . S . Seniors Housing & Care Investor Survey and Trends Report ” further supports rising interest in senior housing investing . The survey indicated that 19 % of respondents were already invested in the senior housing sector , and 20 % were interested in pursuing such investments in the future . This data overall shows a remarkable trend that almost twothirds of property investors surveyed were interested in the senior housing sector . This interest is backed by several key factors and benefits of senior housing investments . Further ,
several forecasters have predicted that the senior housing sector will continue to skyrocket in the near future .
Below , we will detail some top reasons to start investing in senior housing .
# 1 . Baby Boomers Are Driving the Demand
If there is one fact becoming excruciatingly clear throughout our research on the senior housing sector , it is that more and more Baby Boomers enter retirement each day , thus driving up the demand for senior housing . This trend will continue over the next many years , as Baby Boomers will continue to need housing for decades . By 2035 , 79.2 million Americans will be age 65 or older . With these numbers , the demand for senior housing is massive and is just beginning .
The average senior housing resident is typically 83 years of age or older . With the oldest Baby Boomers today averaging 73 years old , the U . S . Census Bureau estimates approximately 8.5 million Americans are age 83 or older . Further , the U . S . population is growing . By 2025 , the U . S . Census Bureau estimates that our senior population will exceed 10.2 million people . The key point from these facts is that in the coming decade demand will rise for senior housing .
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This makes senior housing investing a reliable , savvy opportunity for longterm investments .
Another key benefit of senior housing is that not only is there a huge population demand , but there is a needbased demand as well . This demand is nondiscretionary and merely a consequence of the chronic care issues that come with an aging demographic . This demand is unique to senior housing and does not correlate with other commercial real estate sectors such as office , retail , or industrial properties .
A further benefit of senior housing over other commercial real estate sectors that senior housing is far less affected by technological risk than other industries . This creates a more certain investment analysis for senior housing , while such an analysis of other sectors could be limited by technological changes .
While senior housing has its own business cycle similar to other sectors , the business cycle of senior housing is far less fluctuant . This is because senior housing does not depend on changes in employment rates and expansion and contraction of GNP . In today ’ s times , seniors are primed to live out their senior years using the alternate forms of income compared to a traditional job . These alternate income sources include retirement plans , stock portfolios , insurance benefits , and 401K programs , among others .
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