Most Investors Seek To Grow Senior Living Holdings As Transaction Volume Surges

Senior living transaction volume reached $24 billion in 2025, representing the highest level in over a decade, amid continued interest from most investors.

More than three-quarters of investors (86%) in the most recent edition of the JLL Capital Markets Investor Survey said they seek to increase their exposure to senior housing this year. Combined with student housing and medical office real estate, senior living real estate is “among the three largest alternatives” in real estate investment opportunities today, the survey found.

Respondents are more convinced that cap rates will decline than they were a year ago. Last year, 57% expected cap rates to decrease and 40% anticipated no change. This year, 85% expect cap rates to fall over the next 12 months, while just 13% believe they will remain stable. In total, 98% of respondents foresee cap rates either declining or holding steady, with only 2% expecting an increase.

The largest pool of senior living investors in 2025 came from private capital sources, accounting for 50% of transactions by volume, a decrease from 60% in 2024 and below the average of 52% since 2016, the report said. The next largest cohort of investors includes real estate investment trusts (REITs) and public buyers at 32% followed by 12% from institutional sources.

“Overall, private buyers continue to take advantage of a less crowded buyer landscape, a trend seen across other property sectors as well,” the report states.

Most senior living markets have “fully recovered” to pre-pandemic occupancy levels, with primary markets averaging 89.9% occupancy and secondary markets reaching 90% in the fourth quarter of last year, representing 19 consecutive quarters of census growth. Primary markets saw stabilized occupancy drop to 80.2% in the second quarter of 2021, since then, occupancy has recovered methodically, increasing 970 basis points to 89.9% in the fourth quarter of 2025. Secondary markets posted a similar rebound, jumping 980 basis points from pandemic-era lows to 90% in the fourth quarter of last year.

Strong investor sentiment and occupancy growth coincide with low new construction starts with new project starts declining 77% in primary markets and 62% in secondary markets from the last development peak cycle. This has catapulted senior living rental rates to grow 28.8% from pre-pandemic levels to an average of $5,479 per month, the report states. The sector has also witnessed steady increases in price-per-unit, hitting $182,800, an increase of 29% compared to 2024.

Demographic trends also continue to give investors confidence in senior living as the population of those over the age of 80 will grow by 36.6% over the next decade compared to 5% projected overall population growth. Eighty-six percent of respondents said they plan to increase their senior housing exposure in 2026, the report found.

To start 2026, those monitoring senior living investment trends have signaled a hot start to the year as demand continues to grow. This comes as property pricing gets more aggressive as competition heats up for stabilized assets in strong markets.

In February, SHN reported on a Cushman & Wakefield survey that found respondents were most interested in active adult and assisted living investment opportunities.

This trend appears to hold true in the most recent JLL survey as assisted living leads investor interest for the most targeted asset type with 40% of respondents noting it was their biggest opportunity. Independent living interest has also swelled in the last 12 months, up from 19% of respondents as their largest opportunity to 29% this year.

Respondents were also asked to identify what they view as the greatest potential threat to the senior living market over the next year. The top two concerns, each cited by 29% of participants, were worsening economic conditions and workforce availability. Volatility in both the borrowing and labor markets is weighing on underwriting assumptions, with valuations vulnerable to reassessment and labor costs at risk of increasing, the report states.

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