Investment Rising Rapidly in Age-Restricted Housing

Seniors housing & care is the largest “alternative” asset class based on investment volume over the past decade. Investment in the sector has been particularly robust over the past six years.

Annual buying activity from 2014 through 2018 averaged $17.5 billion. Investment in 2019 is on pace to reach at least $15 billion.

In 2018, acquisitions fell 7.7%. The year-to-date 2019 total slipped 6.2% from the prior year. Interest may have waned somewhat from seniors’ yield premium coming down and from overbuilding concerns (though construction has slowed considerably).

The larger driver for the slowdown in acquisitions activity is likely limited available product to buy, both individual assets and portfolios.

Investment is still relatively small in the 55+/active adult sector but rising rapidly according to Real Capital Analytics’ data, which covers all types of age-restricted income-producing properties, including active adult.

Acquisitions exceeded the $1 billion mark first in 2014 and reached $2 billion in 2018. Last year’s rise over 2017 was impressive at 13.7%.

Buying activity remains robust in 2019, and sales are on pace to exceed 2018’s total by a sizeable margin.

By Jeanette Rice, Americas Head of Multifamily Research, CBRE.