The assisted living and memory care sector continues to struggle with elevated financing costs and compressed margins despite progress in occupancy and labor stability, according to Cambridge Realty Capital’s senior housing capital markets report. That said, the senior housing market overall posted a year of operational and financial strides while contending with ongoing challenges.

“2024 has been a year of catching our breath and laying the groundwork for good things to come,” said Tony Marino, managing director at Cambridge. “We’ve seen some positives in rental rate increases, labor market stability, and occupancy growth, but we’re still waiting to turn the corner on interest rates and financing costs.”

On the positive side, occupancy has grown steadily throughout 2024, which indicates a modest but consistent recovery, according to the report. Workforce dynamics have also stabilized, giving operators more predictable and manageable labor — with average rents growing by 5% year-over-year. However, a disparity exists with market leaders commanding significantly higher rents while others struggle to meet financial benchmarks.