U.S. Senior Housing Market Facing a Supply Shortage
- The low vacancies across senior housing communities are caused by a high population of citizens aged 65 and older. As the population of this age group increases, the unit supply will tighten further.
- The high demand is continuously boosting rental rates across the country. This commentary outlines rental rates on a state-average basis and highlights the top five states for highest unit count and rental rates.
- DBRS-rated properties reflect this trend, as they exhibit high occupancy rates, low unit counts and augmented rents across CMBS deals.
There are industry investors who see this high demand market as a ripe opportunity for investment. Constructing more facilities through the private sector can present a solution in housing more seniors.
The Denver metro area remains a popular location for senior housing. Marcus & Millichap’s First Half 2018 National Seniors Housing Research Report calls Denver is a Top 10 Seniors Housing Construction Market. Denver currently has 2,145 units under construction and in Q4 2017, the city had a 90.2 percent stabilized occupancy rate.
Recent projects include Avenida Lakewood, a 230-unit apartment community for active adults 55 and older, which broke ground in December 2017, and Village Cooperative community will be the first owner-occupied senior housing cooperative in Loveland, CO.