The Senior Living Property Sector: How is it Perceived by the Institutional Investor?

Abstract

Executive Summary. The senior living and long-term care property sector has expanded in response to changing demographics and the increased needs of an overall aging population. As the population of baby boomers reaches retirement age and moves into the "sunshine" years, the demand for real estate products designed with elderly end users in mind is growing, and the risk/return profiles of these investments are shifting. The aim of this research is to shed light on the perceived risks and returns associated with the specific types of investments available in the seniors housing real estate sector. We queried members of the Pension Real Estate Association to determine how they view this property sector compared with alternative real estate investments, as well as more traditional institutional investments, such as stocks and bonds. We found that they do not appear to be investing in most of the seniors housing product available, as they perceive it to have relatively high risk, and they do not perceive the returns to be high compared to more traditional real estate investments or alternative investments like international real estate.