Senior Housing Entering a Steady Period

The recent opening of Clarendale in Mokena, IL, a seniors housing community near Chicago.

CHICAGO—Direct investment into US commercial real estate hit $553 billion last year, the most since 2007, and the seniors housing sector got its share. There were 514 institutional transactions closed and $18.7 billion in sales, a record-setting year and 4.5% higher than 2014, according to a new survey of professionals in seniors housing just published by CBRE. But there was a noticeable pullback in the fourth quarter, especially by REITs, and experts say that even though the sector will remain robust in the coming year, it will probably not see a big increase in investor activity.

“We are going to see a lot of new units come online in 2016,” Bennett Johnson, a CBRE vice president for seniors housing and care, tells GlobeSt.com, and some investors may adopt a wait-and-see attitude. The National Investment Center says that at the end of 2015, developers had 48,903 units under construction, more than double the number under construction three years earlier. “Compared to the momentum we’ve seen in the last few years, there may be some slowdown.”