Investor curiosity in seniors housing stays optimistic heading into 2023

CHICAGO– Regardless of pricing uncertainties limiting capital markets exercise, curiosity in seniors housing stays optimistic as traders search larger yields from various asset lessons, in line with JLL’s Valuation Advisory group’s sixth annual Seniors Housing Investor Survey and Outlook.

Of the traders surveyed, 44% indicated they might improve their publicity to seniors housing in 2023, and 44% indicated they might make no change to their present investments. Solely 12% of surveyed traders indicated they might lower their publicity in 2023. Buyers are extra bullish on the assisted residing and expert nursing segments of the sector this yr, with 31% of respondents indicating they might put money into assisted residing up from 28% in 2022 and 26% of traders all in favour of expert nursing, up from 17% the prior yr.

“Whereas there are definitely challenges within the present capital markets, the underlying fundamentals of the seniors housing sector stay sturdy,” stated JLL Managing Director Brian Chandler, MAI, CRE, Co-Lead for the Seniors Housing Observe, Valuation Advisory. “We’ve seen rising occupancy charges, rising rents and a really muted building pipeline, which can drive demand by way of 2023 and past.”

Key takeaways from the report embrace:

• Occupancy restoration fueled by wholesome demand and delayed stock progress
  •  Stabilized occupancy reached a historic low of 80.3% throughout major markets post-COVID. Since then, occupancy has risen to 84.4% in major markets and up 5% in secondary markets to 85.9%. Whereas it’s nonetheless lagging from the peaks seen earlier than the pandemic, This autumn 2022 marked the seventh quarter in a row for constructive absorption. Inversely, stock progress has fallen 41% on common in the identical time intervals.
• Non-public capital takes on an growing share of funding
  • As institutional traders and core funds pull again in most sectors, non-public capital has taken an growing share with builders and house owners searching for to enter the seniors housing house. Robust demographic tailwinds proceed to drive demand and better yields than different core asset lessons drive investor demand.
• Lease in seniors housing amenities has been steadily growing, with annual lease progress choosing up throughout 2022
  • Previous to the pandemic, seniors housing rents had been steadily growing round 2% to three%. After eight quarters of declining progress, the tempo of lease progress accelerated by way of 2022 up 4.9% on an annual foundation, in comparison with 1.5% at the start of 2021.
• Low historic progress of seniors housing in some Sunbelt markets presents alternative
  • Of the quickest 30 metros with greater than 100,000 residents aged 75-plus, 27 of those are within the Sunbelt. Nevertheless, the speed of progress for seniors housing has various, with some markets, together with El Paso, Texas and choose Florida markets, seeing restricted progress over the previous decade presenting a possible alternative to extend the speed of progress of seniors housing to match the mission inhabitants progress.

“The 80-plus inhabitants within the U.S. is anticipated to develop by greater than 50% within the coming decade in comparison with the general inhabitants rising simply 4.7%,” famous JLL Managing Director Bryan Lockard, MRICS, Co-Lead for the Seniors Housing Observe, Valuation Advisory. “This underscores the big wave of pending demand for added seniors housing and nursing care amenities offering ample alternative for builders, house owners and traders within the sector long-term.”

JLL Valuation Advisory is the important information to the altering face of actual property values and threat.  The group brings collectively unrivalled human intelligence and expertise, with steady, data-driven insights to uncover a panoramic view of worth and threat throughout sectors and geographies.

JLL’s 2,000 certified valuation professionals are linked throughout greater than 50 nations, sharing insights and real-time knowledge to advise on altering market dynamics and traits earlier than they occur. A world group of sector-based specialists, the group delivers tailor-made consumer options in your actual property and enterprise asset pursuits, giving an correct image of worth and threat throughout any alternative.

U.S. property valuation and tax consulting providers are carried out by JLL Valuation & Advisory Providers, LLC, an entirely owned oblique subsidiary of Jones Lang LaSalle Included.

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