High Operating Costs, A Top Concern in Seniors Housing

Investors and developers may be planning to increase capital allocation and exposure to senior housing over the next 12 months, but the emerging asset class poses some significant challenges. According to a recent survey from CBRE, investors are concerned about the high operating costs of senior housing, particularly in active and lifestyle facilities.

In the Senior Housing and Care Investor Survey, 43% of respondents said that property operating and development costs remain the top concern. The concern over operating costs increased from a year ago, and have increased largely because of labor shortages.

Construction activity and related oversupply issues were the second biggest challenge, with 22% of respondents choosing these costs as a top concern also increased as a top concern for investors.