Senior housing's real shortage is sellers

There is no shortage of money bidding for senior housing: investors spent $12.1 billion in the first quarter, the highest quarterly total in at least twenty years, according to MSCI data cited by Bisnow, and 86% of institutional investors told JLL they planned to increase allocations this year. Over the past twelve months, only data centers have traded more among property types. The sellers are staying home.

T7 Capital co-founders Ari Adlerstein and Josh Simpson told Bisnow the friction has shifted from price to persuasion: second-quarter pricing per unit reached just shy of $185,000, up from $182,800 in the first quarter and more than 30% above the start of 2025, according to MMCG Investment, yet "It's harder to convince sellers to sell their property, by far," Adlerstein said.

The owners' resistance tracks the income statement: rents at nursing care homes jumped 5.6% year over year in the second quarter, according to NIC Map, as the supply of available beds shrank, and the oldest baby boomers entering their eighties are producing the long-awaited demand wave faster than new units can be built. "There's not enough units coming online to meet up with demand, so our senior housing friends are sitting pretty," Adlerstein told Bisnow, adding that Covid is what finally allowed the sector to boom.

Skilled nursing owners are especially reluctant, the T7 partners said; instead of selling, they are refinancing into U.S. Department of Housing and Urban Development loans with thirty-year or longer terms and planning to hold. The buyer pool, meanwhile, is full of traditional multifamily investors who came looking for better yield, but the horizons do not match. "Most of our clients on the skilled nursing side are family offices without any sort of fund life. They're buying for their kids and grandkids and great-grandkids," Adlerstein said. A family office measuring hold periods in generations is not easily dislodged by a price that makes sense to a five-year fund.

Price alone will not close that gap. The seller's alternative — a 30-year HUD loan plus rent growth — is a formidable competing bid. That makes the first-quarter volume look less like a peak than a rationed flow, and the $12.1 billion figure could have been higher if owners had chosen to come to market, a hesitation the T7 partners say is why it was not. For allocators, the lesson is not to read the per-unit appreciation as evidence of a broad bid: it is evidence of a narrow one, and the capital chasing senior housing will have to work harder for access, through off-market relationships, recapitalizations, or by waiting for owners whose reasons to sell eventually change.

The only property type trading ahead of senior housing offers the parallel: data center capital, as this publication has argued, now behaves more like infrastructure than real estate. Senior housing is the reverse — an operating business financed like a bond, where the seller's refinancing rather than the buyer's appetite sets the effective clearing rate. The asset to own is the one whose owner can afford to hold, which is exactly why so little of it trades.