Senior Housing Investment Returns Continue to Trend Downward

Senior housing is no longer outperforming every other asset class when it comes to investment returns.

The annual total senior housing return through the first quarter of 2017 was 12.72%, which is slightly lower than the annual total industrial return of 12.80%, according to data analyzed by the National Investment Center for Seniors Housing & Care (NIC).


The total annual return for senior housing has been trending down since it peaked at 20.37% in the middle of 2014.

Senior housing investment returns did continue to eclipse the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index (NPI), however. The NPI outcome was 6.89%, according to NIC.

The NPI is a property-level index that tracks investment return performance for commercial real estate.


Third-quarter 2017 investment return data for NCREIF-reported senior housing properties, meanwhile, totaled 2.73%, comprising a 1.36% income return and a 1.38% capital return.

The performance measurements reflect the returns of 102 stabilized senior housing properties, which were valued at $4.9 billion in the first quarter of this year. The third quarter of 2017 represents the first-ever quarter that the number of senior housing properties in the NCREIF universe was greater than 100.

Written by Mary Kate Nelson

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