PORTLAND, OR — How is the seniors housing market just like every other commercial real estate food group? As is the case with office, multifamily and fill in the blank, seniors housing is feeling the impact–in terms of slowing construction–of the ever-rising costs of labor and materials as well as stricter lending parameters.
The good news here, as Marcus & Millichap points out in its first-half 2019 National Seniors Housing Research Report, is that the slowdown allows supply and demand to catch up with each other. “Both independent and assisted living developers are slowly pulling back on construction,” the report states, “a reflection of tighter lending and rising construction costs. Although development has been above unit demand on a macro level, the pace of occupancy erosion has slowed and will likely reach equilibrium this year.”