17 Quarters and Counting: Senior Housing’s Unstoppable Occupancy Growth

The senior housing investment sector just reached another milestone: Q3 2025 marked the 17th consecutive quarter of occupancy growth, extending the longest upward streak in the industry’s history.

According to the National Investment Center for Seniors Housing & Care (NIC), occupancy across the 31 Primary Markets rose to 88.7%, up from 88.0% in Q2. Independent living climbed above 90% for the first time since 2019, while assisted living reached 87.2%.

In a real-estate world where supply frequently outpaces demand, here is one sector where demand is clearly leading supply – and it appears likely to remain that way for the foreseeable future.

Monthly Investment Newsletter – October 2025

As of Q3 2025, the senior housing sector is outperforming most commercial property types on returns, experiencing record absorption and benefiting from structural supply shortages. Cap rates are compressing, yet they still offer a meaningful premium over risk‑free rates and over multifamily yields. Occupancy is approaching pre‑pandemic highs, and long‑term demographic drivers remain unchanged. Occupancy, cap rates and investor sentiment all improved through Q3 2025, while macroeconomic conditions remained volatile. With cap rates hovering around 6.8 % (the highest absolute yield in more than a decade) and spreads over the 10‑year U.S. Treasury still above 250 basis points, senior housing offers a rare window where investors can capture both outsized income and room for further cap-rate compression.

Senior Housing Cap Rates: Trends & Implications

In Q3 2025, cap rates remain a central focus for senior housing investors. The capitalization rate, or cap rate, reflects the ratio of a property’s net operating income to its purchase price and serves as a proxy for yield. Because senior housing is an operationally intensive asset class with unique demographics and care requirements, its cap rates have historically run higher than other real‑estate sectors. Today, the sector offers some of the highest absolute yields in commercial real estate, even as cap rates have been tightening.