Skip to main content Skip to footer

Seniors Housing: Opportunity in Plain Sight?

  • Seniors housing sales volume has steadied north of $3 billion.
  • Opportunities are likely to appear over the next 12 months.
  • Occupancy losses have affected operations of both seniors housing and nursing care facilities. Meanwhile, technology is making it easier for people to stay in their homes.
  • Long-term demographics point to a rebound in the asset type, but specialized expertise in operations is important.
  • Harrison Street, Omega Healthcare, The Portopiccolo Group, AEW, and Brookfield Asset Management have been the biggest buyers over the past 12 months.

The seniors housing sector has faced challenges of late from increased operating costs, negative headlines, and lower occupancy. Fundamentals still remain stressed, and a recent survey from the American Health Care Association and National Center for Assisted Living reported that more than half of nursing homes and just under half of assisted living communities are operating at a loss, and that only 25% of them are confident they can survive one year. Occupancy challenges are a contributor, as NIC MAP data have shown that seniors housing occupancy rates — pre-pandemic in the mid-to-upper 80% range — have fallen into the upper 70% range of late. Nursing care facilities’ occupancy has declined slightly more rapidly, into the mid-70% range. Whether this occupancy loss is cyclical or structural is still to be determined.

Investment is showing signs of improvement in Q2. Overall volumes are up year-over-year, at more than $3 billion in three straight quarters. Cap rates are higher than in other asset classes, with Real Capital Analytics reporting yields in the high-6% range per its hedonic pricing series. Over the past year Healthpeak Properties has been the largest seller, for more than $4 billion. Welltower has been a net seller as well, parting with $1.4 billion in assets (though it has acquired roughly half that amount during the same time). The biggest buyers have been Harrison Street, Omega Healthcare, The Portopiccolo Group, AEW, and Brookfield Asset Management.

Opportunities will appear. While many owners are not willing to sell at discounts, given the above-mentioned survey results, the next 12 months will likely provide chances for new investors to buy. It is important to note that seniors housing requires expertise, and new investors should expect a learning curve because of numerous regulations in-place. A recovery of fundamentals is due, as long-term demographics are favorable for an occupancy rebound. Outdated facilities could also be ripe for repositioning as covered land plays.

Related Experts

Aaron Jodka

Director, National Capital Markets Research


As Director of Research | U.S. Capital Markets, Aaron is responsible for all aspects of research within the Capital Markets platform. He synthesizes and interprets a variety of data and information to stay ahead of trends that put our clients in an optimal position to make informed decisions. Aaron promotes the Colliers brand via best-in-class research reports, weekly insight posts, thought leadership, and contributions to numerous panels, media outlets, and industry events.

Aaron collaborates with every team at the firm and wears many hats: in-house economist, advisor, consultant, thought leader, strategic business analyst, presenter, and, of course, researcher. He connects with various industry experts within the Colliers organization to provide a customized solution for each client.

With a deep understanding of markets throughout the country, he provides a unique perspective on market dynamics across asset types and investment strategies, providing clients with tailored data and analytics to ultimately guide decision-making solutions.

Before joining Colliers, he spent 11 years with Property & Portfolio Research (PPR), now CoStar Portfolio Strategy. There, he advised institutional clients on their commercial real estate investment strategies across property sectors and also spoke at industry events, quarterly CoStar webinars, and in front of client audiences. Aaron also led and directed a team of economists who monitored property markets across the United States. Near the end of his tenure, he helped establish a new business unit at CoStar, leading in the hiring, training, and coaching of a team of 50 market analysts. 

Outside of the office, Aaron can be found cheering on his children at their extracurricular activities. He also enjoys hiking, travel, relaxing at home or at the lake, or plugging away at one home project or another. Last but not least, he's an avid fan of Boston sports teams.

View expert