Market Trends & Opportunities - Senior living REITs like Ventas and Welltower are experiencing significant gains, with Welltower shares up over 40% [1] - Over 4 million baby boomers will reach 80 years old in the next 5 years, driving occupancy rates in senior living communities to new highs [2] - Ventas, a senior living REIT with a $31 billion market capitalization, has seen its stock rise approximately 14% year-to-date [2] - The industry is seeing returns in the sevens going in with low to mid-teens on levered IRRs, indicating significant growth in assets [3] Investment & Development - Ventas is buying billions of dollars a year in senior living assets below replacement costs [3] - Annual inventory growth at senior living facilities in Q2 dropped below 1% for the first time since NIC began tracking this in 2006 [4] - The number of senior housing units under construction in the fourth quarter of last year was fewer than 22,000, the lowest in over a decade [5] - Construction labor scarcity, material costs, and current rent levels are making new development returns challenging to justify [5] - Population growth is expected to more than offset even the highest level of new development in senior housing [5]
Baby Boomers drive senior housing