Investor Survey Reports Senior Housing Cap Rate Decline

Barchart·01/02/2026 00:10:04

A recent report released by NIC MAP indicated that the senior housing sector is attracting substantial capital. Specifically, transactions in 2025 stood at $16.3 billion.

The growing demand for senior housing likely explains why respondents to CBRE’s “U.S. Senior Housing & Care Investor Survey, H2 2025” indicated no change or a decrease in capital rates since April 2025. Additionally, “more than 74% (of respondents) said they expect cap rates to compress over the next 12 months,” the report said.

Breaking the metrics down further:

• Senior housing cap rates fell by 17 basis points (bps) over the past six months

• Skilled Nursing cap rates decreased by 14 bps

• Active Adult and Assisted Living cap rates dropped by 18 and 19 bps, respectively

• The cap rate for Independent Living communities fell by 20 bps, the segment with the largest decline from the previous survey

The survey results indicated that 84% of respondents anticipate cap rates to fall over the next 12 months, while 16% anticipate no change in cap rates. No participants believe that cap rates will increase in 2026.

Meanwhile, 69% of survey respondents anticipate rent growth of between 3% and 7% over the next 12 months, while CBRE forecasts annual rent growth of more than 5% over the next 24 months. “Rental rates that make new development feasible remain approximately 15% to 20% above market rent in most core markets, but this gap is expected to continue contracting in 2026,” the report said.

According to data from NIC MAP, the senior housing sector will need to add over 200,000 units to meet the rising demand from an aging population. Additionally, “top-quality Independent Living communities delivered between 2018 and 2021 stand to benefit the most, as any new construction will likely offer fewer amenities and lower-quality interior finishes due to rising costs,” according to the report.

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