Senior housing is entering one of the strongest stretches in its history, but it rewards developers who treat it as an operationally focused business first. That was one of the core messages from a session at CREDA Conference this week discussing why senior living is positioned to offer the next wave of opportunity within multifamily.
Lisa McCracken, head of research and analytics at the National Investment Center for Seniors Housing and Care (NIC), moderated. She was joined by Julie Ferguson, president of the Southern Division at Ryan Companies US, and Arick Morton, CEO of NIC MAP, the senior housing industry’s data provider.
The average senior housing resident moves in at about age 80, Morton said. The 80-plus population is expected to grow about 35% over the next five years and roughly double by 2050, he said.
That demand is already converting into move-ins. Since recovering its pandemic losses, the sector has absorbed units at 1.5 to 2 times its pre-pandemic pace. Meanwhile, construction starts have fallen to near all-time lows, squeezed by building costs, labor inflation and interest rates.
As a result, occupancy has gained roughly 200 basis points a year for four years, reaching 90.4% in NIC’s primary markets as of the third quarter. NIC estimates the sector needs about 100,000 new units per year to keep pace. The most ever delivered in a single year is about 56,000.
Capital is Following the Fundamentals
Investors have noticed. “We’ve had all the traditional investors and lenders … but there’s a lot of new capital coming into this space,” McCracken said. Traditional lenders and REITs are now joined by private equity, family offices, sovereign wealth funds, pension funds and life insurance companies. In industry outlook surveys, senior housing regularly shares the top spot for investor confidence with data centers. “Who would have thought [that]?” McCracken commented.
Better performance data has helped. For years, senior housing returns were buried in an “other” category of the NCREIF Property Index; after a decade of NIC advocacy, the sector was broken out in 2024. The numbers show a sector that took a hit during the pandemic but has proved to be durable over 20 years, thanks to need-driven demand. It also rebounded faster than most property types after the global financial crisis of 2007-2009.
Building Makes Sense Again
Ferguson said that from 2017 to 2022, Ryan built and developed more than 30 senior living communities across the U.S. There is a “significant difference in the volume of senior living versus multifamily volume. That’s important to point out,” she said, “because senior living is not as large of a product type, but it certainly has its place in the market.”
Three years ago, it was cheaper to buy existing senior housing communities than to build new ones, so investors largely walked away from development. Ferguson said that over the past six months, rising valuations have closed the gap. “Those are at parity today, and that’s been driven by a lot of the equity that’s come into the space,” she said. “We’re seeing cap rates in the senior living space sub-5[%], which doesn’t happen very often and kind of sounds a little like a multifamily cap rate. So folks who built a lot of product pre-pandemic and delivered a lot of product during the pandemic have really benefited from the desire of people to invest in this alternative space.”
McCracken noted senior housing projects are penciling on the coasts, where rents support new construction, while activity in the middle of the country remains thin.
Morton pointed out that, as is the case with multifamily more generally, the real unit of analysis for senior housing is the submarket. “It’s a submarket business,” he said. “Most senior housing is going to compete on, call it a 15- to 25-minute drive time.”
Not Just Multifamily with Extra Amenities
The panel was candid that multifamily experience doesn’t translate directly. About a decade ago, Ferguson said, a number of multifamily developers entered senior living assuming housing is housing. Perhaps one or two are still in the business.
The differences start with the building. Multifamily typically runs 80% to 85% rentable square footage, whereas senior living runs 55% to 65%. “It’s an amenity-rich environment,” Ferguson said. “You need a lot of different spaces for your residents, so that rentable-square-foot ratio is very different.”
Rather than unit absorption, analysts focus on net worth and market penetration: the share of age- and income-qualified seniors who choose senior living. That rate has held near 10% nationally for decades.
The Operator is Critical
In multifamily, management can often come later. But in senior housing, Ferguson said, equity partners want to know the operator before they commit, and the operator should help shape site selection, market selection and design. “If your operations are not going well, if your marketing team isn’t getting it done, it doesn’t matter what your real estate is like. [Senior housing] is a very operationally focused business.”
She advised looking beyond portfolio size to what qualifies an operator as institutional quality: strong systems, the ability to recruit and keep talent, and a track record that can be verified.
McCracken noted that operators and developers also must be careful about how they market senior housing to aging baby boomers. “If you’re selling sick care, frail care, that is not the message that’s going to resonate. It’s the longevity, the wellness programming, the lifestyle. That has been a big shift in our sector. And that’s even within memory care and assisted living.”
As Ferguson said, “This is real estate, but it’s also healthcare and hospitality.”
For developers and investors willing to respect those nuances, the panelists emphasized that the opportunity is real, and the industry welcomes new entrants who come prepared.
This post is brought to you by JLL, the social media and conference blog sponsor of the CREDA Conference 2026. Learn more about JLL at www.us.jll.com or www.jll.ca.
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