Seniors housing remains a stable investment, survey says

Real estate professionals remain generally optimistic that seniors housing will remain a stable investment, according to results of the third annual NIC/NREI Investor Sentiment Survey.

Beth Mace, chief economist and director of capital markets research for the National Investment Center for Seniors Housing & Care, detailed the research findings in the July issue of the NIC Insider newsletter. The results are based on 200 responses to an online survey sent to real estate professionals in the NIC and NREI databases in June; 138 of the participants said they were involved in the seniors housing industry.

Forty-seven percent of poll participants said they believe that the pace of construction will increase over the next 12 months, and 79% reported feeling confident that new construction will not lead to overbuilding. “This may reflect the fact that development is concentrated in certain markets,” Mace wrote.

Fifty-six percent of respondents said they expect a slight increase in occupancy rates. New competing properties have been the biggest factor affecting occupancy in the past six months, according to two-thirds of survey participants.

Real estate investment trusts are playing a smaller role as capital sources than in years past, according to the real estate professionals, whereas regional banks are growing in importance.

Additional NIC data

Data released earlier this month from NIC indicate that seniors housing is 89.7% occupied nationwide as of the second quarter 2016, with varying rates of construction in markets throughout the country.

The data were part of the expansion from 99 to 140 of the number of metropolitan markets covered under the NIC MAP Data Service. NIC data now include markets where 71% of U.S. households headed by someone aged 75 or more years are located.

National average monthly rental rates asked for senior housing are $3,595, according to the data, which suggest a slow, steady climb in asking rents amidst a plateauing senior housing and care market across many regions of the country, according to NIC CEO Robert Kramer.