Marcus & Millichap

Seniors Housing

  • $985,500,000 Value of recently closed transactions
  • 94 Closed sales in most recent year
  • $94,364,000 Total value of recent listings Search current listings
When it comes to demographic shifts, the Graying of America is a mega-trend that has led to the creation of a vibrant seniors housing industry.

Investment specialists in the Seniors Housing Division offers investors the most effective research, advisory, financing and transactions services tailored specifically to the unique attributes of each senior housing property type. Our agents are well-versed in all property types, including seniors apartments, assisted living facilities, independent living facilities, skilled nursing facilities and continuing care retirement communities.

Adam Lewis

Adam A. Lewis
Vice President/National Director
Seniors Housing Division
(503) 200-2000
adam.lewis@marcusmillichap.com

Seniors Housing Research and Data

Skilled Nursing Report

Managing Costs Key to Skilled-Nursing Operations Operating fundamentals stabilize, encouraging...

Seniors Housing Report

Seniors Housing Navigates Construction Cycle; Private Investors Step Forward as Institutions and...

Seniors Housing Special Report

Framework in Place for Seniors Housing Sector to Combat COVID-19 Contagion; Additional Aid From...

Beyond the Health Crisis: Seniors Housing Special Report

Seniors Housing Adapting to Health Crisis; Sector Implements Numerous Changes to Manage...

Seniors Housing Market

REITs More Selective, Providing Additional Opportunities for Private Buyers And Equity Funds in Seniors Housing

 

Favorable demographic trends and a bright economic outlook will propel the national seniors housing market forward in 2016. The number of individuals age 65 and older is steadily rising as our nation’s baby boomer generation is on the cusp of retirement. Growth in this age tranche has encouraged development in the seniors housing segment, and mounting home prices across the country are encouraging some seniors to monetize their equity and redeploy proceeds into smaller, age-restricted dwelling units. As a result, luxury communities featuring a multitude of amenities such as golf courses, tennis courts, pools and community centers are becoming more popular among older households seeking to maintain an active lifestyle. Thousands of units are underway this year and the construction pipeline remains full, causing some supply-side pressure in select markets and softening fundamentals. Southern markets are particularly affected as units underway represent more than 10 percent of current inventory and thousands more units are planned. As the baby boomer age segment moves closer to retirement in the next few years and desires the services provided by seniors communities, demand for housing will heighten, strengthening property operations and easing concerns of overbuilding in many of these areas. Tight conditions and limited supply growth in other areas of the country could begin to foster more development as demand strengthens and rents advance to record levels.

Investment in seniors housing assets will remain strong throughout 2016 as the segment provides buyers with favorable spreads compared with other traditional multifamily properties. The threat of higher interest rates is causing REITs to become more selective as their cost of capital increases. This has opened the door for increased activity from private investors, who are picking up the slack with millions to invest, and private equity funds that are placing billions into the segment. Overall, the price per unit is nearly triple the cyclical low achieved in 2010 and initial yields are holding steady in the mid-7 percent area. Cap rates for IL and AL centers have compressed and will hover in the low-6 to high-7 percent range, depending largely on asset quality and location. Properties with a value-add component are especially attractive to private buyers. Assets in need of repositioning will remain popular, as capital infusions allow owners to push rents and increase yield. Investors should be mindful of the construction pipeline, as development in some markets, such as parts of Texas and Florida, are concerning and could cause softening property operations in the months to come.