BBG Seniors Housing Survey Highlights Positive Trends for 2025 Market Outlook

Insights from BBG's 2025 Seniors Housing Survey

The BBG, the largest independent commercial real estate services provider in the U.S., has released its third annual survey focusing on the seniors housing market, providing vital insights from industry experts concerning the trends predicted to shape the landscape in 2025. Conducted in March 2025, the survey collected responses from notable investors, developers, lenders, and brokers, offering a comprehensive analysis of anticipated changes, especially in key areas like capitalization and rental rates, stabilized occupancy, operating expenses, and overall market performance.

Key Findings

According to the survey, there are several important takeaways that demonstrate the optimism prevailing among market participants.

1. Capitalization Rate Trends: It’s projected that capitalization rates will either remain stable or experience slight compression, consistent with the findings from the 2024 survey. All surveyed sectors, including active adult living, independent living, assisted living, and memory care, have reported relatively unchanged cap rates. Conversely, skilled nursing and Continuing Care Retirement Communities (CCRC) are exhibiting decreased cap rates compared to last year.

2. Increasing Rental Rates: An overwhelming 90% of respondents foresee a significant increase in rental rates across all care levels for 2025. This projected growth reflects a robust demand in the seniors housing sector, indicating that operators are positioning themselves to accommodate the evolving needs of their residents.

3. Occupancy Rates: Active adult living facilities are leading the charge with the highest projected stabilized occupancy rates. In contrast, skilled nursing facilities are expected to report the lowest. Notably, CCRC facilities have shown a pronounced disparity in occupancy stabilization compared to other sectors, suggesting a need for tailored strategies in this segment.

4. Revenue Margins: Confidence in the market's profitability is also echoed in the responses, as 63% of those surveyed anticipate an expansion of profit margins in 2025, a notable increase from the 50.5% reported previously.

The Importance of the Survey

R.J. DeBee III, Managing Director and National Seniors Housing Practice Leader, expressed enthusiasm about the survey results and the insights they provide regarding the current landscape of investment opportunities and challenges within the seniors housing sector. With over 96% of respondents maintaining a positive outlook for the U.S. seniors housing real estate market, it’s clear that sector stakeholders are preparing for ongoing growth and development.

Conclusion

The BBG survey shines a light on the optimism and resilience of the seniors housing market, reinforcing the idea that as the demand for diverse care options increases, so too will the opportunities for investors and operators to adapt to these trends. As we approach 2025, stakeholders are advised to stay informed and agile in their strategies to best position themselves within this ever-evolving market. For more information about BBG’s extensive services, which range from valuation to advisory roles in the real estate sector, visit BBG's official website.

Overall, the trends outlined in this survey are expected to play a pivotal role in shaping the strategic decisions of various market participants, ensuring that the seniors housing sector thrives amid changing demographics and growing demands.