Thinking of investing in senior housing? Now may be the perfect time.

While the senior housing market has cooled in recent years both in terms of new construction and acquisitions, optimism is high among industry insiders and active investors, in particular, who feel now is the ideal time to invest. With the pandemic recovery in the rearview mirror, the market is experiencing increased demand, a supply shortage, and a forecast that these trends will continue. This represents ample opportunity for investors who understand the value of a long-term strategy.

Let's take a closer look at the contributing factors to this reality of the senior housing market.?

• New construction in the senior housing market has lagged, even dropped off in the past six years, with new senior housing starts falling to 0.2% of current inventory. That's the lowest level in recent history. Many investors became selective on new starts and acquisitions due to a decline in property values related to increased interest rates and the introduction of tough legislation in some states.
• At the same time, demand is back up and will continue to rise. Baby boomers are now approaching 80, and while many held off on securing senior housing during the pandemic, it's inevitable that as they age, this population will begin to search for long-term housing solutions such as independent living in apartments, senior housing communities, assisted living, and even skilled nursing and memory care facilities.
• At this pace, the senior housing industry will fall short of the needed inventory by 50% next year, according to projections from NIC MAP Vision, a senior housing data and analytics provider. By 2030, senior housing researchers estimate there will be a 550,000 senior housing unit shortfall, which is projected to grow to a trillion-dollar investment shortage by 2040. This represents a critical shortage and an urgent need for investors, not to mention robust opportunity.
• In this environment, rent growth remains strong and senior housing occupancy is experiencing a robust recovery with historic absorption growth of 40% year over year.

Many investors are keeping their eyes on the Federal Reserve and what action they'll take in mid-September. Recently, Federal Reserve Chair Jerome Powell indicated if inflation continues to decline, a rate reduction could be on the table. Regardless of what happens in September, patience is key. Active investors recognize the wisdom of playing the long game in the senior housing sector, given the demographic projections, the forecasted need, and the stunning shortfall in supply.

Whether you're ready to build today or looking to capture the ballooning demand for senior housing solutions in the near future, selecting the design-build construction model for your commercial build is a key strategy to positioning your investment profitably. When you're ready to consider your options, DBS Group can put senior housing sector success within your reach, starting with our invaluable design-build predevelopment services. Simply put, you can build your investment portfolio while together, we build the future of senior living in our community.

If you’d like to explore possibilities or discuss specific opportunities in senior housing. Send me a DM or email to set up a time to chat.