Senior Living Has 100% More Demand Coming…with Barely Any Supply

0:00Senior housing is one of those asset classes that people talk about like it's either a guaranteed wave where you're going to make a ton of money no matter what, or it's this complicated niche you should never actually touch. But the truth is, it's neither. It is a real operating business. It's heavily driven by demographics, and it has its own risks and regulations and underwriting rules that are not all that similar to buying a single family rental. But at the same time, there are really strong demographic demand and supply tailwinds that are propelling this business into being one of the most interesting and, dare I say, exciting asset class for real estate investors to consider.

0:44I'm Dave Meyer, and today I'm joined by Jerry Vinci for a deep dive into the senior housing market. We'll break down the demand story and why this can be such a compelling asset class. But we'll also talk about how those headline occupancy numbers you see can be a little misleading, how there are different product types within the senior housing umbrella that you should consider, and what investors really need to understand about operations, margins, and risk before they ever consider writing a check. This is On The Market. Let's get into it.

1:22Jerry, welcome to the show. Thanks for being here. Thanks for having me, Dave. appreciate it. Yeah, excited to have you on. Give us a little bit of your background. Who are you and what do you do? Yeah, sure. Happy to. Yeah, I spent nearly 30 years kind of at the intersection of the operating side of senior living, as well as the capital-facing side of senior living. For the operator side, I'm the founder of a company called CCRG, short for CCR Growth, and it's a demand generation agency. We work exclusively with senior living, and I always describe it is we help operators optimize their pipeline.

1:58So we typically own the whole experience from the moment a family starts their search online to the day that they move in. And then on the capital side, I'm co-founder of a company called Norden, that's N-O-R-D-O-N. And we're essentially an independent diagnostics firm built for investors and capital allocators who are underwriting senior housing. So it's like the same core methodology. we're using as the marketing side of our business, but it's just a completely different customer. All right. So Jerry, when you talk about senior living, it feels to me that there's a lot of different subcategories of senior living.

2:38So like, what are we actually talking about? What are the, you know, is this assisted living? Are they big facilities, small facilities? Or what entails this big umbrella of senior living? There's typically four categories of senior housing. There's independent living, which is your 55 plus housing. You also have in that category, sometimes you'll see like CCRCs, which stands for continuing care retirement community or life plan community. Those are your active adults, you know, people who might just be looking to downsize and live among other people who like similar things that are of a similar age that they are.

3:15Then you have assisted living, which is kind of like the next level of care. Then you have memory care, which is for dementia, Alzheimer's, and then you have skilled nursing, which is kind of, you know, the old nursing home model. Okay. Just improve more. So it's not such a dark, scary place like it used to be. But those are typically the four main categories. And then even within those, you have, you know, you have residential assisted living, which are like micro communities of five or six residents all the way to buildings that have, you know, 800, 900 residents. So it's really just a broad stroke.

3:50Yeah. So generally it's just people, it sounds like anywhere from 55 years up in all different walks of life, different stages of their life, different needs, different desires. So there's a lot to cover there. I would also imagine though, like, is it a different customer too? Because I would imagine for like an active community, like you mentioned, it's, you know, to one or two individuals making the decision for themselves. As it gets older, you're like, you just talked about dealing with family members. So like in terms of different asset classes, where are the opportunities? Where are the challenges?

4:26The challenge with the housing market, I think, is the fact that boomers, there's a good percentage of them that are house rich and cash poor. So you see that number that I think it's over 50 % of them have less than 250 ,000 in assets. So it's like, how can they afford senior living? while they're selling their homes to do it. So you've got the top third of boomers who will sell their home. They'll get into senior living, no problem. They'll pay those higher monthly fees and all's good. Then you've got the middle tier. And that's kind of where I think the most opportunity is because affordable senior housing is not necessarily something that there's a lot of right now.

5:03You see a lot of investors are pumping money into these luxury independent living communities. And what we really need is assisted living and memory care. And that kind of goes back to the demographic piece of it, too, because we look at this number, we hear about silver tsunami, we hear, oh, you know, there's this massive swell. And I like you had said on on one of your episodes, too, that it's I think tsunami is like the worst word you could possibly use, because like when I think of tsunami, I think of this giant wave that's going to come crashing down really fast and destroy everything around it, but it's more like a glacier than it is like a tsunami.

5:40It's moving slow and there's really no way to stop it. It's coming for us whether we like it or not. But the demographic story is like by 2030, all boomers will be 65. And by 2040, we'll have 110 % more people over the age of 85 than we have right now. And typically 80 to 85 is the age range where people move into senior living. So even though this population is hitting 65 and above now, it's not really until they hit 80 that it's really going to start impacting senior living. So we're kind of just at the beginning stages of this. And I think that's why everybody's kind of like blowing it off.

6:20They're saying, we've heard about this for 10 years. Everybody's been talking about the silver tsunami, but nothing's ever come of it. And now here we are starting to see that transition happen. So it seems that the investing case is just demand then, right? Like there's just going to be a lot of demand for senior housing in the next, sounds like for decades. Yeah, at least the next two decades. I mean, there's also been a little bit of a misnomer about the baby boomer generation, too, because I think there's a assumption that there's this massive generation. And then once they're gone, what are we going to do with all this housing that we've built or all these things that we've created for the boomers?

6:57Is it just going to be wasted? But there's actually more millennials than there are boomers. Yep. 73 million millennials and 71 million boomers or something like that. So there's actually more. So anything that's that's built or being repurposed now for senior housing is going to be available for the next two generations as well. So I think it's a pretty sound investment. But yeah, like you're saying, I mean, 10, 10, 20 years, it's not it's not going to be an overnight thing. But looking at the industry overall, in terms of demand, I mean, we've had 18 consecutive quarters of growth. and in Q4 of 2025, I think the national average occupancy was at 89%.

7:36And by the end of 2026, it's supposed to be over 90%. So demand is there. The real challenge in senior living is the supply. That was going to be my question. I mean, we are so woefully behind, it's almost scary at this point. Tell me about that because that's sort of where multifamily has gone awry in the last couple of years. There's demand for housing, but very localized oversupply. Some areas still undersupplied, but big glut of multifamily, particularly in the Sunbelt. You look at that, that's hurt returns, rent growth, cap rates, all that. But it sounds like in the senior living side, that supply glut isn't there.

8:13Maybe the opposite exists. Yeah, it actually is. It's the complete opposite of that. If we look at between now and 2040, to meet the demand that's going to be coming with senior housing, we would have to build around 100 ,000 to 125 ,000 units every year to meet that. And if we just look at like last year, as an example, in Q3 of 2025, there was 1000 units that had started construction. And in Q1, there was like 1500. So in all of 2025, there was probably like 4000 units that had started construction. And in total, there's like 20 ,000 active units being built. So we're like, we have less than 25 % of the supply being created right now than we actually need.

8:56Wow. That's insane. I mean, from an investor standpoint, seems like a strong case, right? Strong, high demand, relatively low supply. But to me, just being a novice, I don't know anything about this, but like the operations seem complicated. So like, tell me what is the operating model for an investor? Yeah, I think that's the biggest challenge because I would say like multifamily is like 70 % of the way they're in understanding senior living, but it's the, that last 30 % is the operating piece of it. You just mean like underwriting and like what it takes. Yeah. Financing that kind of stuff. Yeah.

9:30Because, because the, the real estate drives the asset value, but then the operating business inside of it drives the NOI. So that's, that's the piece that is like the variable that really, until you get into this market, you don't really know what that looks like. Operators, they're not just running the building, they're running like the revenue engine, for example, that's running the building. They have to create the operating profit that is being underwritten in those deals. In multifamily, you sign a 12-month lease, the resident pays, or they don't. It's pretty mechanical in terms of collecting rent and things like that.

10:07But in senior housing, every resident is the result of a long sales process. You know, families, they don't sign up online. That's interesting. They have to visit. They have to tour. They ask like 30 questions. And then they come back with their adult children a lot of times. And then they think about it for six months before they ever even sign. So it's a big decision. Yeah. Yeah. It's a huge decision. And then if you think about all the pieces that are running inside of the community itself that have to be run and managed well, you've got the caretaking side. You've got dining. You've got entertainment.

10:38You've got travel, hospitality. all of these things wrapped together around a real estate asset, it's pretty complex to try to figure out who's performing well. And even if one number, like say occupancy looks great on paper, there could be some underlying issues that maybe they're not seeing. Yeah. Okay. That's super, super helpful because I get the macro trends here. It makes a lot of sense to me, but the operations is every business is hard, but it's a specialization, right? You have to know this. As an investor, though, I'm curious how you get involved because you could do what you're talking about.

11:16You start a business where you're operating this whole thing. But I actually was looking at investing in a fund that was buying senior living, and they were going out and buying the facilities and then doing triple net leases to operators. And that way they didn't actually have to do all that stuff you just talked about. And they had a tenant doing that, essentially. So I'm just curious what you think about different models and ways people can access this asset class. Maybe some people in our audience want to go out and do that. But if they don't, what other avenues are there to get in? Well, what you're talking about with the triple net leases, essentially, that's kind of the old model where the investors would partner with the operators.

11:58And essentially, the operators would pay rent to that investment committee. Now, we're seeing a lot more of like the shop, the senior housing operating partner relationships where they're taking a piece of that profit as well. The housing. Yeah. Yeah. Oh, interesting. Yeah. So their profits are tied directly to the operational piece of that business now. So if it's run well, if they've optimized all areas of that community, then that's going to be more profitable for everybody, not just for the community. And I guess what's in it for the operator then? Do they get lower rents or something in exchange for giving up equity to the real estate owner?

12:37I mean, probably less risk for them, right? Because they're not shouldering it all themselves. That would probably be the first thing I would think. But for multifamily, like looking to get into this space, I mean, you see there's a lot of REITs out there that are doing this where, you know, you can invest, say, like$100 ,000 to$500 ,000 or something and get in with a public fund or something like that. I would start somewhere like that. I wouldn't necessarily go into like private lending or anything crazy like that right out of the gate, you know, before you really understand this industry. Yeah.

13:08This is great stuff. Learning a lot about the senior housing market, but we do have to take a quick break. We'll be back with Jerry right after this.

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15:59Welcome back to On The Market. I'm Dave Meyer. Let's dive back in with Jerry Vinci. What about like really small assets? Because I've heard other real estate investors who like go out and buy an eight unit or whatever, you know, and it's nice and they convert it into an assisted living facility. Like, what do you make of that model? We're kind of doing like a small boutique kind of thing. Who's running it? That would always be my first question. Well, that's the thing. I'm always wondering. It's like, you're a real estate investor, which is fine. But being a landlord and being operating assisted living facility seem like really different businesses to me.

16:37I hosted another podcast, BiggerPockets podcast, and I've had a guest on there who's doing this really successfully. But he was working in assisted living as a nurse. And then he was like, oh, I can do this. And so he knew what it took and has a genuine care for seniors and being in that world. That makes sense to me. But just based on your body language, it seems like maybe you don't recommend the average real estate investor go out there and do this. I would say, again, who's going to be operating the place? Is it going to be them? If it is, then they have a serious crash course ahead of them to learn how to operate even a small community because most of those small residential assisted living homes that you're talking about that are like five, six, maybe eight residents, they're typically like a higher level of care.

17:27It's usually a memory care or assisted living. So it's not like you're just going to be able to step in and manage this place like a hotel. You've got to provide meals, entertainment, 24-7 around the clock care in most cases. So it's pretty complex. And yeah, I'm pretty shocked. I've seen quite a few investors get in. And I think it's because, you know, from a from a multifamily housing standpoint, it just it seems similar, right? Like you can get in. It's not a huge investment. I mean, a typical senior living community can go anywhere from like, you know, five to 15 million as as an investment.

18:02So like, you know, starting there would be a pretty big hill to climb, whereas like a residential assisted living home, you could purchase a home for, you know, 500 ,000, a million, something like that. And, and, you know, renovate it and turn it into one of these communities pretty quickly and easily and turn it around and make a profit on it. But it's, it's all about the operating piece. Who's, who's running this. So assuming people in our audience would be interested in getting into this in some way or another, the syndication REITs, the public option, we're operating. themselves. What are the major things you need to understand as you underwrite a deal?

18:38What are you looking for in a senior living facility, both from a real estate perspective and sort of a demand and I guess whatever else? I think due diligence in senior living is very similar to any other industry. There's a ton of different workflows that typically we'll go through with due diligence, but there's, there's questions that are not being asked right now. And again, I keep going back to the operator piece of it, but I think that's probably the most important one is, is making sure that you're, you're learning and understanding how things are functioning inside enough to know whether, like if this asset's already producing, can it keep producing and can it do that sustainably?

19:19So, so just looking at that, some of the questions that, you know, I think that operate, that people looking to invest in this space should probably be asking, you know, the first question would definitely be, you know, can this operator actually sustain or grow occupancy in the specific local market? And that's the thing about senior living too, unlike some other markets, it's hyper local. 85 to 90 % of residents will move in from a five to 10 mile radius of your community. Oh, wow. Okay. Yeah. So it's not like you have to create some massive national campaign to fill your building. It's typically a small radius, but, you know, just making sure that you have all of those pieces in place.

19:59But yeah, answering that question would be first and foremost. And then some of the other things that we typically look at, you know, depending on where where somebody is, like in terms of writing a deal, there's there's multiple things. There's like pre acquisition. Right. So if they're just looking to get into it, there's a market entry position. So if they're looking at like maybe they want to expand into a new space, but they're not sure there's a specific question for that. You know, so for if somebody is looking to get into the market, you know, they should be asking, like, is there actually room for us in this market?

20:31Or is it already locked up? You know, outside of just what the community is doing, is there space? You know, do they can we can we create a new a new community in this space? Or do we have, you know, are the competitors so strong that there's no room? Another big one in senior living is is transitions because you'll see a lot of times that the operator will change or management will change within the building. So a lot of times you have to ask yourself like six months from now, when occupancy softens, can I actually prove what the new operator inherited? So we can, for example, have a diagnostic that here, here's where occupancy and here's where performance stood the day the deal was signed.

21:11And here's where it stands the day the keys change hands, because those can be very different numbers, right? So making sure you understand so you can hold your operator accountable is very important. All right, everyone, we got to take one more quick break, but we'll be back with Jerry right after this. People love to call real estate passive income, which is interesting because most of the investors I know are very busy, busy finding deals, busy managing teams, busy worrying they picked the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10 % below market value in top rental markets across the country.

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