CHICAGO — Despite the struggles of the seniors housing industry during the COVID-19 outbreak, investors in the sector expect capitalization rates on transactions to increase.
The expected increase applies to all types of seniors housing, as well as all from Class A to Class C. In all cases, investors predicted cap rates higher than their recent averages, but still lower than the most recent high.
The results came from an update to the JLL Spring 2020 Investor Survey, meant to reflect changes in approach following the onset of the pandemic. The Chicago-based firm reached out to the same 109 respondents as the original survey, representing transactional professionals that specialize in seniors housing. The original survey was conducted Jan. 31, while the update was conducted May 22.
In the original survey, only 8 percent of respondents expected cap rates to increase, compared with 83 percent in the updated survey.
However, the respondents also expect transactions to take longer to close. In the original survey, only 8 percent of respondents expected sales to take a year or more, compared with 34 percent in the updated survey.
To view the full survey summary, click here.