While senior housing has been a historically successful industry, it has continued to grow into a stand-alone, viable, and significant class of real estate in its own right. A recent report from CBRE, a commercial real estate investment firm, shows that, on the whole, real estate investors are becoming increasingly more attune to the senior housing market. As stated by the study, investors are beginning to focus their attention on nursing homes, assisted living facilities, and other long-term care centers. If you’ve been considering commercial real estate investment in Chicago, this may be the next opportunity to keep your eye on.
The sector has recently experienced tremendous growth, which is an attractive quality to investors. In 2018, the senior housing and nursing care industry was reported as having a market value of nearly $470 billion, and experts forecast the sector will continue to see considerable expansion well into the future.
Encouraging Demographic Trends
It’s common knowledge that America’s population is aging, which is a promising sign for the senior housing investment market. Baby Boomers, the largest demographic of Americans, will find themselves in growing need of care and housing in the decades to come. As we move forward, the demographics will only get better. It is projected that by 2050, the 65-plus age group will equal 88 million, which is nearly double its current population size.
An Aging Inventory
Better yet, fifty-eight percent of the senior housing property in operation is more than seventeen years old, and thirty-two percent is over 25 years old. These facilities will become increasingly more outdated as care advances, regulations progress, and tastes change. This leaves a big opportunity for the development of new properties in senior housing.
Senior housing has yielded strong returns for investors and managed especially well during the recession. Given that it is a need-based industry, it is considered to be more resilient than other potential asset classes.
Commercial Real Estate Investment Chicago
The senior housing industry has demonstrated that it’s not only a dependable investment during an economic downturn, but also a return leader across the spectrum. For those interested in commercial real estate investment in Chicago, keep the senior housing industry on your radar.