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.
“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