The senior living sector posted the highest return of any property type measured by the National Council of Real Estate Investment Fiduciaries (NCREIF) in the first half of 2025, Caroline Clapp, senior principal at the National Investment Center for Seniors Housing & Care, wrote Monday in a blog post.
The sector had a positive total return of 2.08% in the second quarter of 2025, an increase from 1.87% in the first quarter. That brings year-to-date returns to 4%, Clapp said.
Senior living in the second quarter outperformed the broader expanded NCREIF property index, or NPI, by 85 basis points, with the index posting a total return of 1.23%. Independent living again outperformed assisted living, coming in with returns of 2.15% and 1.99%, respectively in the second quarter.
“This outperformance may be driven by higher margins typically generated in lower acuity settings such as independent living, which require less staffing and labor expenses than higher acuity settings such as assisted living. Additionally, independent living has had higher occupancy rates during this period,” Clapp said.
“Over the longer run, since NCREIF began tracking returns data for these subtypes roughly a decade ago, both assisted living and independent living posted similar returns averaging more than 5.5% annually,” she added.
Senior living as a property type has performed well over the past 10-, 15- and 20-year periods, lagging behind only industrial and self storage, Clapp said. At those intervals, data show that senior living outperformed the NPI on an annualized basis by 52, 41, and 297 basis points, respectively.
The senior living occupancy rate on the whole (independent living plus assisted living) increased by 0.8 percentage points to 88.1%, which Clapp attributed to driven by net absorption of new senior living units. Independent living increased to an average occupancy rate of 89.7%, and assisted living increased to 86.4%.
“By property type, occupancy rates for independent living have made slightly higher gains in recent quarters than assisted living, which is a reversal of trends in 2022 and 2023,” Clapp said.
The number of senior living properties tracked within the NPI has grown to 214, compared with 56 properties initially tracked in 2003, Clapp noted.