**Investor Survey Reports Senior Housing Cap Rate Decline**
The senior housing sector continues to attract significant investor interest, with total transactions in 2025 amounting to $16.3 billion, according to a recent report released by NIC MAP.
This increasing demand for senior housing helps explain the findings of CBRE’s “U.S. Senior Housing & Care Investor Survey, H2 2025,” which revealed a trend of stable or declining capital rates since April 2025. In fact, more than 74% of survey respondents expect cap rates to compress over the next 12 months.
Key findings from the survey include:
– Senior housing cap rates declined by 17 basis points (bps) over the past six months.
– Skilled Nursing cap rates dropped by 14 bps.
– Cap rates in the Active Adult and Assisted Living sectors decreased by 18 and 19 bps, respectively.
– The Independent Living segment saw the largest decline, with cap rates falling by 20 bps.
Within the broader investment landscape, 84% of survey participants anticipate further cap rate declines over the next year, while 16% foresee no change. Notably, none of the respondents expect cap rates to rise in 2026.
Rent growth remains a significant driver of interest in the sector. About 69% of survey respondents predict rent increases of 3% to 7% over the next year. CBRE, meanwhile, forecasts annual rent growth exceeding 5% over the next 24 months. Despite this optimism, the report notes that rental rates required to support new development still remain 15% to 20% above existing market rents in most core markets. However, this gap is expected to narrow through 2026.
Looking forward, NIC MAP data indicates that the sector will need to add more than 200,000 units to accommodate the aging population. Among the beneficiaries of this trend are Independent Living communities delivered between 2018 and 2021, which are expected to outperform newer developments that will likely feature fewer amenities and lower-quality finishes due to rising construction costs.
