Skip to main content Skip to footer

2020 | Year-End Texas Seniors Housing & Care Research & Forecast Report

Download Report

Texas Seniors Housing records negative net absorption in 2020 primarily due to COVID-19


In 2020, the Seniors Housing and Care industry experienced devastating effects from the COVID-19 pandemic. The consequences of the pandemic caused a drop in occupancies for many communities. The hardest affected category are skilled nursing facilities (SNFs) versus Seniors Housing Communities. According to NIC MAP Data Service data, U.S. nursing care occupancy has fallen over 11 percentage points since the pandemic began.

According to the CDC, 81% of COVID-19 related deaths involved people 65 years of age or older. Further, 21% of those deaths occurred in a nursing home or long-term care facility. However, not all Seniors Housing Communities and SNFs were affected equally. Some were not disturbed by COVID-19 at all. Operators have had to deal with isolation, safety, staffing, increased operating expenses and many other issues caused by the pandemic.

Seniors housing and skilled nursing operators have shifted their immediate need efforts from testing and caring for COVID-19 affected patients to prevention by implementing strict safety protocols. Those protocols include sanitation, limited visitations, limited new residents and personal protection equipment to stave off further infection. Prioritization and distribution of COVID-19 vaccines have been given to the elderly and seniors’ housing facilities. 


Demographics Overview

The U.S. Census reports that seniors represent 10% of Texas’ population and that 25% of them are living alone. Approximately 25% of seniors 60 and older received food stamps in the last year. Also, the census reports that about 10,000 baby boomers turn 65 every day and that trend will continue over the next 15 years, increasing the need for seniors housing.

According to the latest 2020 U.S. Census estimates, Texas will rank first in population growth. Texas added almost 370,000 residents between July 2019 and July 2020. Approximately 13.3% of the 29.8 million Texas residents are 65-years of age or older.

The oldest baby boomers are in their mid-seventies now and this category of seniors help drive today’s IL development boom. In the past, the 75+ population has been entering IL communities in large numbers, but that’s not the case anymore. Seniors are staying active longer, and industry players are now running feasibility analyses on the 80+ population. It’s difficult to predict when we will see a large number of Baby Boomers start renting IL and AL communities. Advances in healthcare and technology may push this process beyond 2025.




Supply and Demand

The National Investment Center for Seniors Housing and Care (NIC) reported a decrease in the number of units absorbed on a net basis in the primary U.S. markets during the second half of 2020. Annual absorption was -5.9%, 410 basis points lower than in Q3 2020 and down 680 basis points from a year ago.

NIC also reported a decrease in the number of units absorbed in Texas during the second half of 2020, -1,444 units; however, on an annual basis there were -2,876 seniors housing units absorbed. All of the major metros recorded negative absorption during the second half of 2020. San Antonio and Austin recorded the least amount of negative absorption while Dallas and Houston recorded the highest amount of negative absorption. Dallas (184 units) and San Antonio (12 units) recorded the highest inventory growth.

All of the major metros in Texas reported a decrease in occupancy during the second half of 2020.

Rent Trends

Senior Housing annual rent growth rate fell in 2020 in Texas, growing 0.3% over the year, with only one major metro recording a decrease. IL and AL Majority average monthly rent fell 0.2% in Austin, increased 0.1% in Dallas, 0.7% in Houston and 0.2% in San Antonio between Q4 2019 and Q4 2020. The Texas average monthly rental rate for seniors housing is $3,866.

Nursing care trends are not as healthy as seniors housing trends. Inventory growth for Texas fell by -0.7% on an annual basis. Annual absorption declined by 14.5% and the occupancy rate declined over the year by 1,010 basis points from 72.8% to 62.7%.

At the end of the fourth quarter of 2020, the Texas nursing care average asking monthly rental rate of $7,130 was 6.3% higher than the average rental rate in the fourth quarter of 2019.

Investment Activity

The 2020 Emerging Trends in Real Estate report by Price Waterhouse Cooper (PwC) ranked Seniors Housing among top subsectors for investment and development. Private equity returns for Seniors Housing properties continued to outpace those of other real estate sectors except for industrial. For the past seven years, Seniors Housing had been ranked number one among all types of Apartment Investments. However, a recent update in October 2020, reveals that the COVID-19 pandemic has cooled seniors housing development. The PwC article indicates developers and investors have pivoted to other property types moving into 2021 including fulfillment centers, warehouses, single-family rental properties and medical office buildings. The October 2020 report by ULI and PwC indicates that this turn towards other property types may be short-lived and the seniors housing industry will still be favored in the long-term.

According to Real Capital Analytics, the average cap rate for Seniors Housing properties in Texas has increased from 5.6% in\ Q4 2019 to 6.0% at the end of Q4 2020. The national average cap rate fell from 6.1% in Q4 2019 to 5.7% in Q4 2020.

The average price per unit in Texas for all senior housing property types (SH and SNF) is $106,402, while the average U.S. price per unit is $119,102.

Under Construction

According to NIC MAP, our Seniors Housing data source, there were 3,838 Majority IL units under construction in Texas primary markets in Q4 2020, followed by 1,779 Majority AL and 160 Majority NC units. Dallas and Houston continued to have high volumes of the Seniors Housing construction. Houston had 2,529 units under construction in Q4 2020, the third-highest in the U.S. behind New York and Washington D.C. Houston is the only Texas market in the top 5 under construction metros.

Construction Costs

Senior living construction costs have been on the rise in the U.S., including Texas, as a result of labor shortages and the rising prices of building materials. Developers have seen hard costs increase anywhere between 7-10% annually. According to The Weitz Company’s national construction data, mid-level assisted living projects development costs range from $194 to $249 per square foot, while mid-level independent living projects range from $168 to $198 per square foot. In Texas, construction costs are still lower than the national average. The highest construction costs among Texas major metros are in Houston where mid-level assisted living projects range from $168 to
$268 per square foot, while mid-level independent living projects range from $146 to $221 per square foot.

Please visit the Texas Seniors Housing Team page to learn more. 


2020 | Year-End Texas Seniors Housing & Care Research & Forecast Report

Download Report
Related Experts

Elena Bakina

Senior Vice President

Houston - The Woodlands

Elena's area of expertise is in the healthcare and senior housing sectors of real estate. She also has experience in corporate office, life science, retail, land transactions and investment sales. Her clients include physicians, multispecialty groups, hospitals, developers, senior housing operators and owners in addition to private investors. Prior to joining Colliers in 2014, Elena was a Senior Healthcare Real Estate Advisor with Coldwell Banker Commercial Healthcare Services Group. Elena's past career as a cancer research scientist with the world’s best cancer centers and research institutions has led her to choose her core areas of specialization. Being actively involved with the healthcare industry through the American College of Healthcare Executives (ACHE) and the Medical Group Management Association (MGMA), helps her to stay updated with the needs of this industry and to better serve her clients.

The most rewarding part of her job is developing relationships with clients and gaining their trust and confidence as their real estate advisor. In regards to real estate transactions, what she enjoy most of all is research, analysis and negotiations.

Prior to moving to the Houston area, Elena lived in many Asian and European countries, which helped her develop a deep understanding of various cultures. Elena enjoys serving Houston’s multicultural community. She  also attended EXPO REAL in Germany several times to promote acquisition opportunities to foreign markets.

View expert

Lisa Bridges

Director of Market Research


Lisa joined Colliers in 2010 as Director of Market Research and has 37 years of commercial real estate experience. Lisa initiates proactive market research projects to further the business goals of the company. She writes and prepares 29 market reports annually, including quarterly reports on Houston's retail, office, industrial and healthcare properties.  Further, she prepares statistical ownership reports for various clients as well as an annual Houston Economic Overview. Lisa also creates PowerPoint market presentations, trade journal articles, and other marketing materials supporting the company's business endeavors. She works with senior management in planning the company's marketing strategy and public relations support for local and national conferences, luncheon meetings, recruitment programs, and special events.  Lisa works closely with the company's brokers to develop effective custom market research material specific to existing and potential clients.

Lisa serves on the Colliers Editorial Board, the Colliers U.S. Research Council, and is a recipient of the Colliers Researcher of the Year Award.

Lisa earned the Commercial Property Research Certification (CPRC) from Colliers University.  CPRC is the first and only accreditation for commercial real estate research professionals. It offers a professional development path to increase strategic and tactical expertise in marketing/research, knowledge of the industry and capabilities with commercial real estate tools.

View expert