There are strengthening opinions that the commercial real estate markets are approaching their bottom and new "green shoots are emerging," based on declines of approximately 100 bps in the 10-year Treasury in recent months.

This is expected to lead to a gradual improvement in investor sentiment, according to JLL. In its Investor Survey and Trends Update for Seniors Housing, rising debt costs have led to widespread repricing across all commercial real estate. Cap rates for seniors housing averaged 5% in Q2 2021, according to NIC MAP, and since then, they have expanded by around 200 bps.

Spreads between the 10-year and seniors cap rates have averaged 462 bps going back to 2008, however, the spread as of Q4 2023 decreased to 292 bps, "with more investors having to contend with negative leverage in the short-term," according to the report.