According to CBRE’s latest senior housing investor survey, investors identified independent living as the best investment opportunity in the senior housing market. On the surface, that makes a lot of sense. As the largest wave of boomers continues to age upward, looking to downsize their homes or move closer to adult children, a shift to independent living would seem to be the first logical step. But is independent living the best bet in senior housing? Don’t whip out your checkbooks yet.
The two main strengths of senior housing investing are 1) demographics and 2) recession-resistance. The first, demographics, ensures that there will be a steady demand for senior housing for the next two+ decades. All segments of the senior housing market can benefit from this senior rush.
The second, recession-resistance, does not apply to each segment of the senior housing market equally—and that’s where many investors, if they are not careful, could get burned. Not all segments of senior housing are equally “needed” by aging Americans. And in times of recession, unnecessary expenses are often the first to go. [Read more…]