For the first time in nearly two decades, senior living occupancy is outperforming other commercial real estate (CRE) sectors, according to the National Investment Center for Seniors Housing and Care (NIC).
Last year, NIC released its SHARK report that offered insights into demographic-driven demand, new construction of communities and outlook on occupancy.
In the first quarter of 2025, average senior living industry occupancy reached 87.4%. That fits with NIC projections that average senior living occupancy will pass peak levels not seen since 2008.
Senior living occupancy growth in the industry’s top 99 primary and secondary markets exceeded that of other sectors, including apartment, strip malls, office and industrial properties, according to NIC Senior Principal Omar Zahraoui. While he noted that could draw more investors to the space, labor, immigration policy and tariffs continue to complicate operations and new development.
In a 2024 Urban Land Institute poll, senior housing ranked behind only data centers in projected risk-adjusted returns through 2028.
The number of occupied senior living units is continuing to grow with no signs of a demand cliff, “but the market is entering a new phase,” Zahraoui wrote.
“By 2026, stronger demand, combined with a potential undersupply of new inventory, is expected to drive upward pressure on pricing, and developers will need to take a thoughtful approach aligning rising development costs with affordable rent,” he wrote.
For every 27 units occupied, 10 are being built across 99 primary and secondary markets tracked by NIC, which is well above the line needed to continue occupancy increases regardless of care type.
By the end of next year, senior living occupancy in “most regions” is projected to surpass peak levels last seen in 2008, with the North Central, Mountain and Southwest regions being the “closest” to reach 2008 historic census levels.
Occupied unit growth continued at a “measured and disciplined” pace with no indication of a “demand cliff” in the future, Zahraoui wrote. But new projects will take years to open and the strong absorption seen in the last two years shows a “clear need” for new development projects.
