Senior Living Sees Positive Momentum in 2024

After a challenging year, the senior living sector closed 2023 with promising momentum, setting a positive tone for 2024.
February 7, 2024

Senior living occupancy, which faced challenges last year, is showing signs of strong recovery, setting a positive tone for 2024. This upswing is highlighted in a new report from Green Street Advisors.

By the numbers: After a sluggish start in 2023, senior living occupancy recovered to about 85% of its pre-pandemic levels by year-end. Green Street predicts a continued increase in occupancy this year. Market rents, which saw a significant hike in 2023, are expected to stabilize in 2024.

Driving the news: The recovery is fueled by various factors, including demographic shifts, improved affordability, and changing health and lifestyle trends among older adults.

Yes, but: The sector still faces challenges, such as lower supply barriers and high capital expenditure needs. These could impact long-term returns compared to other real estate areas.

Regional trends: Midwest metros have shown particularly strong growth in rent and occupancy.

Biggest players: Key stakeholders in the senior living market include Welltower, Ventas, Diversified Healthcare Trust, Harrison Street, Benchmark Senior Living, and Brookdale Senior Living.

Driving the market: An increasing number of adults over 80, coupled with improved wealth and affordability metrics, are driving demand. Over 40% of seniors can now afford senior housing through income alone, a significant increase since 2013. Wage growth in the senior living sector is starting to stabilize, aligning with broader economic trends towards a ‘soft landing.’

The big picture: Despite a 20-25% decline in property values since late 2021, Green Street remains optimistic about the sector’s investment potential, citing attractive private market returns and promising net operating income growth prospects.

CRE Daily is a digital media company covering the business of commercial real estate. Our mission is to empower professionals with the knowledge they need to make smarter decisions and do more business.
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