Walker & Dunlop 2025 Seniors Housing Outlook Emphasizes Resurgence and Increased Demand
As leaders in seniors housing financing and investment sales, Walker & Dunlop, Inc. shares emerging market trends and vital landscape analysis in its newly published Seniors Housing Outlook, "Navigating Growth, Innovation, and Investment in a Transforming Market". The publication comes at a crucial time as this sector experiences renewed energy and heightened competition.
Rising sales volumes, intensified competition, and improved financing conditions are all signs that the seniors housing transaction market is experiencing a resurgence this year. Compared to 2024, activity has accelerated as debt markets stabilize, and investor confidence strengthens around the sector's fundamentals. Transaction velocity is particularly strong for Class A assets in supply-constrained markets, where bid sheets frequently exceed 10 qualified offers.
"Investor enthusiasm has been increasing in the sector due to census growth, rent growth, lack of new supply and the baby boomer wave finally reaching an age demographic that is causing more and more demand," said Kevin Guisti, senior managing director, FHA Finance at Walker & Dunlop. "We are seeing strong property performance helping sponsors refinance debt, pull out equity or sell their assets at healthy levels."
Operational performance is on an upswing with national occupancy recovering to 88.1 percent, a second-quarter high, as net absorption continues to outpace muted new supply. Operators are reporting stronger financial health, with revenue gains outpacing expenses, labor pressures easing, and debt-service coverage ratios improving. Operators are benefiting from both robust demand and disciplined supply, while investors are encouraged by the sector's long-term demographics.
The current demand outlook is compelling. The oldest baby boomers are entering higher-acuity, service-rich living years, with the U.S. Census projecting rapid growth in the 80+ population through 2030. This expanding cohort is likely to sustain move-in velocity and drive further revenue and NOI growth, especially in constrained submarkets.
"With tight supply, increased institutional capital allocations to the sector, and powerful demographic tailwinds, seniors housing is positioned for durable growth over the next 12–24 months," said Brett Murphy, managing director, Investment Sales at Walker & Dunlop. "The sector has reestablished itself as a premier investment opportunity."
Here's what's influencing the evolution of seniors housing today:
- Revenue trajectory: Rent growth should continue in tight markets, with operators offering differentiated services gaining the most.
- Cap rates and pricing: Core assets may see slight cap-rate compression with strong buyer interest, while secondary assets should stabilize as financing improves.
- Financing conditions: Liquidity is set to expand with GSE re-entry and HUD's Lean Express Lane, easing refinancings and acquisitions.
- Development timeline: High costs and stricter underwriting will keep new starts limited, leaving demand ahead of supply through at least 2026.
- Strategy focus: Scale and operator strength will be key advantages. Value-add opportunities remain attractive where pricing reflects pre-renovation performance.
- Policy watchlist: Operators should prepare for potential Medicaid changes and affordability pressures, including scenarios for reimbursement shifts and moderated rent growth.
"The rollout of the HUD Lean Express Lane is a game changer and dramatically improves timing. We have submitted 4 deals into the Express Lane, and received approvals on all deals, with an average HUD review time of 4 business days compared to historical HUD Lean processing times of 122 days," added Ken Buchanan, EVP & Group Head, FHA Finance at Walker & Dunlop. "HUD financing has always been a great fit for the seniors housing sector, and the significantly improved processing time has made HUD an even more attractive financing solution."
Walker & Dunlop has closed $390 million in seniors housing through the second quarter of this year, involving 19 assets across 11 states, with an additional $581 million under agreement.
For insights on seniors housing and to explore key trends shaping the market, download Walker & Dunlop's 2025 Seniors Housing Outlook here.
About Walker & Dunlop
Walker & Dunlop (NYSE:WD) is one of the largest commercial real estate finance and advisory services firms in the United States and internationally. Our ideas and capital create communities where people live, work, shop, and play. Our innovative people, breadth of our brand, and our technological capabilities make us one of the most insightful and client-focused firms in the commercial real estate industry.
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