Published by CNBC | August 19, 2025
More than 4 million boomers will hit 80 in the next five years, and occupancy at both active adult and assisted living communities is already rising fast.
Senior living has long been a somewhat under-the-radar real estate play, with a somewhat unappealing reputation. But it’s on the edge of a boom — a baby boom, to be exact.
More than 4 million boomers will hit 80 in the next five years, and occupancy at both active adult and assisted living communities is already rising fast. This comes as annual inventory growth in senior housing just dropped below 1%, the first time that’s happened since the National Investment Center for Seniors Housing and Care began tracking the metric in 2006.
Ventas, a senior living real estate investment trust with a $31 billion market cap, is betting big on what CEO Deb Cafaro calls the longevity economy.
“We’re buying billions of dollars a year in senior living, and we’re seeing returns in the sevens going in, with low to mid-teens, unlevered IRRs [internal rates of return], so there’s significant growth in assets, and we’re buying below replacement costs,” said Cafaro, who has been at the helm of the company for over 25 years. “I’ve never seen that combination of investment characteristics in my long career in real estate, and so we’re fully taking advantage of all of that.”
Cafaro said growth in the senior living demand pool is expected to be 28% over the next five years. She called the demand tailwinds “incredibly strong and durable.”
“Think about 2000 in the real estate investment trust business — office was over 20% of the overall REIT pie, and health care was 2%. Now when you look at the pie, office is 5%, and what is it now? It’s health care, senior living. It’s data centers. It’s cell towers. Why? Because that’s where the demand is,” she said.
Cafaro said Ventas, which purchases properties but doesn’t develop them, benefits from the deep lack of supply in the senior living sector, from active adult to assisted living to memory care facilities.
Harrison Street is an alternative real estate investment management firm with $55 billion in assets under management. Its U.S. Core Senior Housing strategy posted a more than 30% increase in same-location net operating income last year, according to a company spokesperson. Harris Street has maintained that with new supply constrained and demand durable, this could be the strongest entry point for alternative real estate investment in its 20-year history.
