The senior living sector is “seeing incredible growth and interest,” according to Ken Buchanan, executive vice president of FHA finance at commercial real estate financing, sales, valuation, loan servicing, investment management and research firm Walker & Dunlop.
Buchanan was commenting on the 2024 Seniors Housing Outlook from Walker & Dunlop, which was released Tuesday.
“Although the industry faces rising operational costs, regulatory complexities and the need for enhanced resident care strategies, it is also ripe with possibilities in innovation, particularly in technology adoption and new service offerings,” he said in a press release issued in conjunction with the report.
In spite of signs of improvement in some areas this year, according to Walker & Dunlop, the sector still lags behind pre-COVID levels in some areas. Profit margins, for example, have not yet returned to pre-pandemic levels, according to the report, but rent growth has helped drive revenue by enabling operators to offset increasing costs.
“Despite these hurdles, the sector is ripe with opportunities for innovation, particularly in technology adoption and new service offerings,” the Bethesda, MD-based firm noted.
Demographics favor the senior living sector, the company said, as 25% of Americans will be aged 65 years or more years in 2050, up from 17% in 2020.
“As we look ahead, the future of seniors housing is set for significant transformation,” said Josh Jandris, managing director of investment sales at Walker & Dunlop. “Continued investment in infrastructure and services, coupled with a focus on addressing the diverse needs of an aging population, will be crucial for sustaining growth in this market.”
Walker & Dunlop closed $600 million in senior housing transactions through the second quarter of this year and has an additional $361 million in transactions under agreement.
