Seniour Housing: Investing in a Recovering Market

The outlook for fundamentals in the U.S. seniors housing sector is positive.

Executive Summary

• The outlook for fundamentals in the seniors housing sector is positive. Demographic trends for seniors housing show a steep increase in the relevant age cohort in coming years while hardly any new supply is in the works.
  
• Seniors housing has characteristics that should be attractive to investors plotting both “defensive” and “offensive” strategies. The income stream produced by senior housing is relatively stable compared to other property sectors. Meanwhile, the upcoming rise in the age 75-and-over population should produce strong demand for seniors housing facilities for the foreseeable future.
  
• The income and wealth of seniors is reduced by low interest rates and falling home values, which might result in fewer moving to seniors housing while the economy is weak. However, the sector is less sensitive than other property types to economic swings, largely because tenants of seniors housing are less prone to move than occupants of non-age-restricted apartments.