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**Investor Survey Reports Declining Cap Rates in Senior Housing Sector**
A recent report from NIC MAP reveals that the senior housing sector continues to attract significant investment, with total transactions in 2025 reaching $16.3 billion.
Increased demand for senior housing is a driving force behind this investment surge. Findings from CBRE’s “U.S. Senior Housing & Care Investor Survey, H2 2025” show that respondents noted either no change or a decrease in capitalization (cap) rates compared to earlier in the year. Notably, more than 74% of those surveyed expect cap rates to compress further over the next 12 months.
Key highlights from the survey include:
– Cap rates for senior housing declined by 17 basis points (bps) over the past six months.
– Skilled nursing facilities saw cap rates fall by 14 bps.
– Active adult and assisted living communities experienced drops of 18 and 19 bps, respectively.
– Independent living communities observed the largest decline, with cap rates decreasing by 20 bps.
Looking ahead, 84% of survey respondents anticipate further decreases in cap rates over the next year, while 16% expect no change. Notably, none of the participants foresee an increase in cap rates in 2026.
On the rental side, 69% of respondents expect rent growth of 3% to 7% over the coming year. In line with this, CBRE projects annual rent increases exceeding 5% over the next 24 months. Although rental rates that make new development viable are currently 15% to 20% above current market rates in most core markets, this gap is expected to narrow as 2026 approaches.
As the aging population continues to grow, the need for senior housing remains pressing. Data from NIC MAP shows that over 200,000 new units will be required to meet this demand. Notably, independent living communities completed between 2018 and 2021 are poised to benefit significantly, as new developments are likely to feature fewer amenities and less upscale interior finishes due to rising construction costs.
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