BBG, the nation’s largest independent commercial real estate services firm, today published its third annual U.S. seniors housing investor survey, offering keen insights from market professionals on major trends expected to impact this alternative asset class in 2025.
Completed in March, the survey compiled responses from the most significant U.S. investors, developers, lenders and brokers. It focuses on trends expected to impact the seniors housing market in several areas including capitalization and rental rates, stabilized occupancy, operating expenses and other key market performance metrics.
Key take-aways include expected capitalization rate compression, increasing transaction volume, and projected rental rate growth.
R.J. DeBee III, Managing Director and National Seniors Housing Practice Leader, commented on the survey: “We are excited to release our annual seniors housing investor survey. This survey provides valuable insights on the investment opportunities and challenges currently facing this sector. Many of the findings this year show market optimism. In fact, Over 96% of respondents, have a positive or somewhat positive outlook for the 2025 Seniors Housing real estate market.”
Seniors housing property types analyzed in the survey include active adult, independent living, assisted living, skilled nursing care, and Continuing Care Retirement Community/Life Plan Community (CCRC/LPC). Survey results were analyzed by asset class and market quality with primary markets identified as the top 50 markets within the United States, while secondary markets encompass the remaining markets.
Highlights of the survey include:
- Cap Rates Projected to Remain Flat or Compress: Cap Rates have remained relatively consistent compared to 2024 survey results for active adult, independent living, assisted living, and memory care. Cap rates have decreased for skilled nursing and CCRC/LPC compared to 2024 survey results.
- Higher Rental Rate Growth Projected: Rental rate growth for all care levels is expected to continue to increase significantly this year. Over 90% of respondents, expect rental rate growth in 2025 for all property types.
- Active Adult Leads Stabilized Occupancy: Active Adult is projected to have the highest stabilized occupancy with Skilled Nursing reporting the lowest. CCRC/LPC reported the largest spread in stabilized occupancy when compared to the other care levels.
- Margin Expansion: Over 63% of survey respondents anticipate a net expansion of margins in 2025, an increase from the 50.5% reported in the previous year’s survey.
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