Seniors housing is expected to experience rental rate increases in 2023, despite challenges such as rising interest rates and a constrained lending environment, according to a new CBRE survey. The annual survey found that more than 75% of investors anticipate rental rate increases of 3% or more over the next 12 months across most senior housing classes, with assisted living leading the way.
Survey respondents identified Active Adult (37%) as the biggest investment opportunity in seniors housing this year due to younger baby boomers entering their retirement years. The greatest obstacles for investors include staffing shortages, higher borrowing costs and a limited lending environment.
“Although there are difficulties present, many investors still view seniors housing as an attractive asset class with rent prices trending upwards due to need-based demand and restrictions on future supply,” said Daniel Lincoln from CBRE’s Valuation & Advisory Services Seniors Housing & Healthcare division. “Sustained high interest rates have made it hard for deals to be financed; other issues like staffing shortages are likely going remain throughout 2021.”
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