Seniors housing has increasingly drawn the attention of investors for many reasons. Among them are the sector’s strong investment performance returns. A measure of this performance return is evident by investment managers who own or manage seniors housing properties in a fiduciary setting. This return performance is tracked and captured by data submissions from these investment managers to the National Council of Real Estate Investment Fiduciaries (NCREIF).
Seniors housing and care is the only commercial real estate asset class that experienced positive asking rent growth during the Great Recession. Rent growth has been steadier, less volatile, and has generally exceeded that of other commercial real estate property types.
Senior housing has a unique resiliency in the commercial real estate market as a result of its dual components of real estate, hospitality, and need-driven services. The NCREIF Property Index (NPI) had a total investment return of 9.4% for the ten years ending in the third quarter of 2020. Seniors housing returns compare favorably to this overall index, with an 11.6% annualized investment return over the same period. Returns for both income and appreciation were higher for seniors housing than the overall property index as well as for multi-family.