With senior living occupancy seemingly having bottomed out and now trending upward for several providers as the effects of the pandemic wane, more good news came for the senior living industry, especially assisted living, from the JLL Valuation Advisory’s fourth annual Seniors Housing Investor Survey and Outlook.
Respondents — investment sales professionals and those representing debt providers, private equity and real estate investment trusts — identified assisted living as the most sought-after investment opportunity in 2021.
“After an industry trend toward the more lifestyle-focused segments of seniors housing, market participants are gravitating back to the more traditional and need-driven segments,” according to the report.
Indeed, interest in both assisted living and skilled nursing was up compared with the 2020 report. And interest in memory care remained steady.
Thirty-five percent of respondents conveyed an interest in assisted living, up from 27% last year. And 15% expressed an interest in skilled nursing, up from 9% last year.
Increased interest in those segments seems to have come primarily at the expense of the active adult segment. Interest in the active adult segment in the 2021 survey was at 15% of respondents, down from 24% in 2020 and the biggest drop seen among segments.
Interest in memory care in 2021 was unchanged from the 8% seen last year. Nineteen percent of respondents expressed an interest in independent living, down slightly from 21% in the 2020 survey. Eight percent of survey participants conveyed an interest in continuing care retirement communities, down from 11% in the 2020 survey.
Overall, however, “[i]nvestors remain bullish on seniors housing and care investments,” said JLL Managing Director Zach Bowyer, MAI, head of alternatives asset sectors at JLL Valuation Advisory. “We anticipate market fundamentals to steadily improve and the market to re-stabilize between two and four years, depending on the location.”
Available capital for commercial real estate investment remains near all-time highs, according to the report, with the senior living and care sector seeing a “significant increase” in the percentage of private capital placement.
More good news? “It’s important to note that the long-term demographic tailwinds for the sector continue to be intact,” said JLL Managing Director Brian Chandler, MAI, CRE, co-lead for the seniors housing practice at JLL Valuation Advisory.