Scotsman Guide > Commercial > July 2017 > Department

 Enter your e-mail address and password below.


Forgot your password? New User? Register Now.

Commercial Department: Property TypeCast: July 2017


Property TypeCast

Aging population is only one driver of seniors-housing rent growth

The seniors-housing market has garnered more attention over the past few years as baby boomers swell the ranks of the retirement demographic. Developers have built numerous housing communities for seniors across the country, and investors have been curious about the growth potential of this property class, given that it barely existed 20 years ago. Property graph -17

While rent growth has been robust in a number of markets because of the growth in demand, rent-growth rates have varied widely across the United States.

Markets that have seen the fastest growth are not necessarily the same ones that have seen strong growth in more traditional property types, such as multifamily and office. This is because of a number of factors — with demographics, as one would expect, being the biggest variable.

That is, seniors-housing rent growth should be more prominent in markets with an aging population, such as Florida and the south in general. This presumption is true to some extent, but the data shows that the connection is not so direct.

While a number of southern metros have seen the strongest rent growth, others have seen little to no growth in rent in the seniors-housing niche. Moreover, the markets that have seen the highest rent-growth rates span the country.

It is interesting to note that most of the metros that saw the fastest growth in senior-citizen population (ages 60 and over) are not on this list. Many of these cities — such as Austin, Texas — are recognized more for their overall population growth than for the growth among the ranks of senior citizens. Austin’s 60-and-over population, however, grew nearly 40 percent from 2010 to 2015, yet its independent living rent-growth rate was close to the national average.

Many metros on the list of the lowest rent-growth metros not only had flat or negative population growth but, for the most part, they also had a high ratio of seniors and population-growth rates among seniors above the U.S. average. The cities on the list of the 10 lowest rent-growth cities fitting that description are listed below along with their independent living seniors-housing rent-growth rates between first-quarter 2015 and first-quarter 2017.

  • Jackson, Mississippi, 2.4 percent;
  • Daytona Beach, Florida, 2.2 percent;
  • Springfield, Massachusetts, 2.0 percent;
  • New Orleans, Louisiana, 1.9 percent;
  • Buffalo, New York, 1.7 percent;
  • Evansville, Indiana, 1.4 percent; and
  • Albuquerque, New Mexico, 1.2 percent.

Rounding out the 10 cities on the lowest end of the spectrum, according to Reis’ analysis, are three cities that posted negative rent-growth rates for seniors housing over the two-year period. They are:

  • Youngstown, Ohio, -0.1 percent;
  • Syracuse, New York, -0.2 percent; and
  • Springfield, Missouri, -0.5 percent.

Still, there are clearly a number of factors driving the demand for seniors housing that cannot be attributed to demographics. Economic factors, including job growth, are likely just as significant.

In sum, it pays to understand how differently this asset class has performed across the U.S. Some metros, such as New Haven, Connecticut, and Westchester County, New York, have not seen strong population growth in their seniors demographic, yet they have posted average rent-growth rates for independent living facilities that are in line with the U.S. average.

Other metros that have had a rapidly growing senior population, such as Boise, Idaho, have seen slower rent- growth rates over the past two years. Thus, there are other more idiosyncratic factors in these metros driving rent growth in seniors housing, and it pays to do the research to determine what those idiosyncrasies are and how they affect specific markets. •


Victor Calanog is chief economist and senior vice president for research at Reis Inc. ( He writes a monthly column on property types for Scotsman Guide. Calanog and his team of economists are responsible for data models, forecasting, valuation and portfolio services for clients in commercial real estate. Reach him at Barbara Byrne Denham is an economist in the research and economics department at Reis Inc. She previously served as chief economist at Eastern Consolidated and is a Ph.D. candidate at New York University, where she has studied economics, monetary theory and game theory. Reach her at

Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Scotsman Guide Digital Magazine


© 2019 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy