Seniors housing is poised to see rental rate increases in 2023, despite challenges such as rising interest rates and a constrained lending environment. According to a new CBRE survey, more than 75% of investors anticipate rental rate increases of 3% or more over the next 12 months across most senior housing classes, led by assisted living.
Active Adult was identified as the biggest investment opportunity in the seniors housing sector this year (37%), driven by younger baby boomers entering their retirement years. The most significant challenges for investors are staffing shortages, higher borrowing costs and a constrained lending environment.
Daniel Lincoln – leader of Seniors Housing and Healthcare for CBRE’s Valuation & Advisory Services – commented that “although there are challenges…many investors still consider seniors housing to be an attractive asset class with rental rates trending upward due to need-based demand and constraints on future supply” adding that “sustained higher interest rates have made it difficult to finance deals [and] other challenges such as staffing shortages are expected to persist throughout the remainder of 2021″.
