Berkadia Seniors Housing Commentary Report
Winter 2025
The seniors housing market is poised for a promising future. Demographic shifts have fueled consistent growth while anticipated reductions in financing costs are set to attract increased institutional investment, enabling the acquisition and development of new senior living communities. In our latest Berkadia Seniors Housing Commentary Report, we explore emerging trends informing our outlook for 2025.
Key Takeaways
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Record Demand: 2024 finished with over one million occupied units. There have been more than one million occupied units for 5 consecutive quarters.
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Cap Rate Compression: Declining financing costs and strengthening market conditions suggest that cap rates for modern, high-quality facilities providing comprehensive care services may experience further compression in the near future.
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Declining Construction: The construction pipeline witnessed a steady decline, with the number of units under construction plummeting from a high of nearly 64,000 in 2019 to an estimated 30,000 at the end of 2024.
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Return of the REITs: After a brief hiatus, REITs have reclaimed their position as the leading acquirers in the senior living sector, outpacing operators in 2024 for the first time since 2021.