Senior living outperforms other real estate sectors in National Council of Real Estate Investment Fiduciaries Property Index

Senior housing outperformed other sectors on the National Council of Real Estate Investment Fiduciaries Property Index for the the seventh consecutive quarter of index outperformance.

Senior housing posted a 3.9% total return in the second quarter, bringing the year-to-date returns to 8%. Overall, senior housing outperformed the border NCREIF property Index’s total return by 1.3%, marking the seventh consecutive quarter of index outperformance.

For purposes of the index, senior housing is defined as independent living, assisted living, continuing care retirement / life plan communities and skilled nursing facilities. NIC and other organizations serving the industry typically define senior housing, also called senior living, as independent living and assisted living, including memory care.

The senior housing sector as defined by NCREIF also experienced positive capital appreciation and income returns, which remained near their highest quarterly gains since 2017. The capital appreciation return — the change in value net of any capital expenditures — for the second quarter was 2.5%, whereas the income return yielded 1.4%. 

Senior living posted the only double-digit total return over the past year (14.8%), which was almost 10 percentage points above the NPI’s total return of 5%. 

Within the sector, total returns for assisted living pulled ahead of independent living in the second quarter, as the gap in occupancy rates between the two settings narrowed to its smallest spread since 2014.

Senior living occupancy (independent living and memory care combined) in NIC MAP’s 31 primary markets gained 0.4 percentage points in the second quarter to reach 89.9%, marking the 20th consecutive quarter of increasing occupancy rates. At the current pace of rising demand and stunted development, senior living occupancy, as defined by NIC, is on track to exceed 90% before the end of the year. 

NCREIF added senior living and care to its benchmarking index in 2024 to increase transparency and access to capital for the sector. The NPI also includes office, retail, industrial and apartment sectors, along with senior living and care.