Senior housing occupancy has reached 90% nationwide. As the first of 70 million baby boomers turn 80 this year, development of housing built to cater to the elderly is slowing sharply, creating a growing chasm between demand and supply of senior housing.
Senior housing generated a 10.6% one-year total return in 2025, making it the best-performing asset class in commercial real estate. That was more than twice the overall average of 4.9%.
Developers haven’t responded in kind. Construction starts have plummeted 67% from roughly 30,000 units to 10,000 between 2021 and 2025.
The industry would need to add 578,000 units by 2030 and more than 1 million by 2035 to keep up with demand. That would mean building roughly 140,000 additional units by 2027 and maintaining about a 100,000-unit annual pace after that.
The significant financial need for the sector also includes updating existing properties; more than 2 in 5 units are older than 25 years.
Source: BisNow
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