Senior Living Market Booms: Occupancy Back to 90%—Strongest Since 2017

Senior living and care fundamentals strengthened further in the first half of 2025, with occupancy climbing back to around 90%—a peak not seen since 2017—according to a report released Tuesday by commercial real estate firm Cushman & Wakefield.

Occupancy levels have reached an all-time high in terms of units filled, even as new inventory growth remains near historic lows. The survey, which polled more than 75 senior living and care market leaders, underscores a significant imbalance: to meet soaring demand at current levels, supply must expand by 35,000 to 45,000 units per year starting immediately. For context, the highest annual delivery to date was 34,000 units, while fewer than 10,000 units have been completed over the trailing 12-month period—construction starts have dipped to a record low.

“Secular tailwinds are stronger than ever. To meet market demand at peak levels, supply growth must increase by 35,000 to 45,000 units per year, beginning today,” the report states. “For context, the highest number of units delivered in a year was 34,000 with less than 10,000 units delivered over the trailing 12-month period, with construction starts dipping to a new low.”

Financing remains constrained even as the population of middle-income older adults is projected to double by 2029. The survey finds that half of those individuals will lack the means to afford traditional senior living communities.

Meanwhile, the active adult segment is accelerating, “achieving favorable rent growth indications that are consistent with conventional senior living, with operating expenses and debt underwriting that is more consistent with conventional multifamily,” Cushman & Wakefield reports.

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Transaction activity has rebounded sharply: senior living and care deal volume jumped nearly 70% year-over-year in H2 2024, hitting its highest post-pandemic level “as dry powder emerged from the sideline and debt liquidity cautiously returned to the sector.” Skilled nursing transactions rose 27% year-over-year in that same period.

Looking ahead, regulatory uncertainty and persistent staffing challenges are expected to temper deal flow through H2 2025. At the same time, the average price per unit for transactions climbed 46% year-over-year in Q1 2025—reflecting investors’ renewed focus on core strategies as buyer and seller expectations realign around well-operated assets.

Investment preferences are shifting, too: 37% of survey participants now target core-plus strategies for 2025 (up from 25% a year ago), while 31% are seeking opportunistic or distressed deals (down from 43%), as lender workouts and solid market performance have limited distressed opportunities.