Chart of the Day: Trends in Senior Housing Cap Rates

| April 30, 2013

In the last 12 months, cap rates for senior housing transactions have been declining and have been flat so far in 2013, according to data released by the National Investment Center (NIC) for the Seniors Housing & Care Industry. 

February 2013′s cap rate of 7.5% represents an 80 basis point decline from one year prior. However, in the past three months since the beginning of the year, senior housing cap rates have remained unchanged at 7.5% on a rolling 12-month basis. 

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“The decline in cap rates over the past year would imply a 10.6% increase in value, assuming constant NOI,” says NIC. “More recently, however, seniors housing cap rates have flattened.”

In contrast, office and apartments cap rates have risen by 10 basis points and 20 basis points, respectively, since December, according to NIC. As of February, the apartments sector had a 6.1% cap rate, while the office sector had a 7.1% rate. 

Written by Alyssa Gerace


Category: Chart of the Day, Data, Senior Housing

Comments (1)

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  1. Chris_Foley says:

    Not really talked a lot is the value of the *change* in Cap Rates as it relates to value / wealth creation for real estate owners.
    A rise in Cap Rates means less money for the Owner who is selling.
    So, when investors are considering seniors housing vs. other investments like office buildings or apartments, the decline in Seniors Housing Cap Rates and an increase in office & apartment Cap Rates, means that Seniors Housing Owners/Investors have a better ROI (Return on Investment) as compared to office or apartments.
    Chris Foley
    CPA (Retired)
    Equity National Seniors Housing Brokerage & Advisors
    cfoley@Equity.net