With a rapidly aging population, it is imperative to start planning for the future housing and care needs of the senior population. By 2050, it is estimated that over a
, compared to only 17 percent in 2020. The not-for-profit senior living organization National Senior Campuses reported nearly 22,000 senior living units across the United States in 2021. Other than housing, personal and medical care for seniors is another pressing issue, with huge growth potential. In response to the urgent need for senior housing, many massive senior housing organizations have
. Welltower, Inc., one of the largest of these organizations, owns over 900 properties.
What are the different types of senior housing?
Depending on their individual needs, seniors can choose different types of housing. Independent living, the
most popular type of senior housing in the not-for-profit sector, offers residents basic services while allowing them to maintain independence in their day-to-day activities. Some of these services include meals and housekeeping. In 2022, independent living communities
had the lowest expense ratio, with operational costs amounting to 63 percent of the income brought in by the property. Facilities classed as
majority independent or assisted living also had the highest occupancy rate in that year. Assisted living is suitable for adults who require more assistance than independent living, but more independence than nursing homes. It is also the senior housing type that
has grown the most in the past two decades. Nevertheless, nursing homes had the
highest effective gross revenue per unit and
cap rates. The focus of these facilities is medical care and they often have in-house nurses and doctors.
How has the pandemic impacted the sector?
The occupancy rate of senior housing declined dramatically at the beginning of the coronavirus pandemic. The elderly population is at higher risk of suffering health complications which led to many potential residents choosing alternative solutions, such as staying with family or in their current home. In the third quarter of 2022,
82 percent of senior housing units were occupied – an increase from the previous year but still below the occupancy rate before the coronavirus outbreak. In a 2022 survey, the majority of industry experts expected the occupancy rate to increase in 2023. Another effect is the decrease in employment: The
number of employees per organization fell drastically in 2020 and remained low in 2021. Though the sector hasn’t fully recovered from the pandemic, industry experts had an overall positive sentiment about it. A survey among real estate investors
discovered that 60 percent were interested in senior housing in 2022. More than half of respondents in a survey among industry experts, such as investors, fund managers, developers, and property companies said that they
would recommend holding any senior housing investments in 2023.
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