Before the COVID-19 pandemic began, senior housing investors reported the most interest in the sector’s assisted living segment compared with others, according to CBRE’s eighth Seniors Housing & Care Investor Survey. Although the survey, which includes responses from nearly 150 seniors housing industry leaders, was conducted pre-COVID-19, in January and February, the firm says the results provide a solid benchmark of investor sentiment just before the pandemic began.
The survey showed that 30% of respondents were interested in investing in assisted living, closely followed by active adult (28%) and independent living (27%). Memory care properties remained at the bottom of the investor interest list, garnering only 4% of respondents. Skilled nursing showed the most significant change compared with CBRE’s 2019 survey, declining in interest from 12% to 7%. The survey also revealed that senior housing capitalization rates continued to compress, after slight increases were reported in the 2019 and 2018 surveys.
“In the medium term after the COVID-19 crisis ends, the more need-based segments such as assisted living and nursing care, which are less impacted by economic weakness, may increase in favor,” the survey authors noted, adding that “as the economy and housing market improve, the growing seniors demographic likely will bring the active adult and independent living segments closer to the forefront of investor preferences.”