In the Fall of 2022, the NIC Board of Directors adopted a Strategic Plan which included objectives to “expand the tent” into five Focus Areas over the next five years. These Focus Areas were becoming increasingly important for the senior housing and care industry to understand because of their impact and influence on our customers, operations, and capital structure.

Active Adult: an emerging property type targeting our older adult residents. What can the senior housing industry learn from Active Adult and how can we best engage with this growing property type to better serve our customers?

AgeTech: innovative technologies present an opportunity to improve health outcomes of older adults, modernize operational systems, and optimize staffing effectiveness and efficiency. NIC stakeholders need to be familiar with these technologies and develop strategies for adoption.

Capital for Operations: the senior housing industry has been reliant upon real estate secured capital to grow. High leverage and capital costs have contributed to distress in the industry. Can we access unsecured capital as part of the capital structure to fuel growth, especially to support operational investments such as technology and staffing?

Middle Market: NIC identified the “forgotten middle” in seminal research in 2019. These older adults do not qualify for social subsidies and lack the income and wealth to afford traditional private pay senior housing. Can the senior housing industry develop sustainable models to serve this group?

Partnering For Health: the growing importance of wellness and health care to our customers impacts senior housing operations. How can we effectively incorporate wellness and value-based care to meet our customers’ needs?

In 2024, Focus Area Committees (FACs) were created to help answer these questions. They are led by Chairs Mitch Brown and Jane Arthur Roslovic (Active Adult), Michael Kurliand and Sarah Thomas (AgeTech), Fee Stubblefield and Madisen Medley (Capital for Operations), Matt Ruark and Sophia Lukas (Middle Market), and Jim Lydiard and Joelle Poe (Partnering for Health).

Thanks to the initial efforts of all the volunteer leaders on the FACs, we have made considerable headway into incorporating the focus areas into everything NIC does including conference sessions, case studies, industry definitions, and new educational offerings like our NIC Academy Value-Based Care Course and upcoming Active Adult Boot Camp.

This year, the FACs are focused on helping NIC engage with target audiences. Our goal is to develop engagement strategies to interact with stakeholders in each area to inform them of the opportunities available in senior housing and care, as well as learn about their view and understanding of our industry.

The FACs met in Annapolis, MD on April 23-24^th. NIC hosted a boat tour, reception and dinner on day one. On day two, the committee members took part in a general session and then participated in individual committee meetings. To conclude the day, all attendees reconvened and  reported highlights from individual FAC discussions and also took part in a brainstorming session on the intersection between FACs. The FACs are now working with their Staff Liaisons to finalize engagement plans which will be implemented throughout 2025.

NIC thanks all the FAC volunteers for providing their insight and expertise as we work together to accomplish the strategic objective of “expanding the tent” to each of the focus areas.

NIC Analytics released the NIC Lending Trends Report for the second half (2H) of 2024. This complimentary report includes data trends over eight years for senior housing and nursing care construction loans, mini-perm/bridge loans, permanent loans, and delinquencies from third quarter 2016 through fourth quarter 2024. The report is based on survey contributions from 18 participating lenders.

During 2H 2024, the Federal Reserve initiated a long-anticipated pivot in monetary policy with a series of interest rate cuts aimed at easing financial conditions amid moderating inflation and slowing economic momentum. Beginning in September, the Fed implemented three consecutive cuts, one each in September, November, and December, bringing the federal funds rate down to a target range of 4.25% to 4.50% by year-end.

Survey Comments from the Field:

NIC’s lending survey gathers both data for inclusion in the Lending Trends report and commentary on what is driving those trends. A summary of that commentary is provided below.

As noted by contributors, credit standards largely held steady in 2H 2024, with most lenders maintaining their approach from earlier in the year, while a few reported loosening requirements. Several noted increased competition, thinner spreads, and a greater appetite for growing loan balances, especially from banks.

While many lenders continued focusing on existing relationships, there was also evidence of renewed deal flow and selective onboarding of new clients, particularly for senior housing stabilized assets. Improved operating performance and rising occupancy rates supported lending confidence, although debt-service constraints remained a limiting factor amid persistent staffing challenges and cost pressures. Overall, the fall 2024 interest rate cuts helped restore cautious optimism and contributed to a more constructive lending environment heading into year-end.2024

New Permanent Loan Volume Closed Maintained Momentum Built Earlier in the Year

New permanent loan volumes remained relatively strong in 2H 2024, sustaining the momentum begun earlier in the year. For senior housing, volumes reached more than $2.8 billion in the second half of the year, keeping overall activity in the year 2024 well above any level observed since 2020.

Nursing care lending also outperformed recent years, with volumes reaching nearly $2.8 billion in 2H 2024 ($1.46 billion in Q3 and $1.31 billion in Q4), notably above historical norms. While borrowing costs remained elevated for much of the year, the Federal Reserve’s late-year rate cuts provided some relief, helping to support continued deal flow. This suggests a more stable lending environment, driven by improving property fundamentals, increased lender confidence, and a stronger appetite for long-term investments heading into 2025.

New Mini-Perm/Bridge Loan Activity Remained Cautious, With Signs of Improvement in Nursing Care

Bridge and mini-perm loan activity remained relatively low for senior housing in 2H 2024, with volumes still well below historical norms. After reaching $290 million in the third quarter, senior housing bridge loan volume fell to $200 million in the fourth quarter, highlighting the sector’s ongoing caution around short-term financing.

In contrast, nursing care saw a notable shift, with fourth quarter bridge and mini-perm loan volume surging to $619 million, marking a notable increase in the time series. This surge reflects renewed lender interest in select skilled nursing opportunities, buoyed by improved Medicaid rates and continued operational stabilization.

While borrowing costs remained elevated for much of the year, the Fed’s late-2024 rate cuts began to ease pressure, helping unlock more lending activity. Even so, short-term lending remained concentrated among stronger credits, with lenders favoring sponsors with demonstrated performance and lower risk profiles.

Construction Lending Still Soft/Subdued Despite Isolated Upticks

Construction loan activity remained subdued in the 2H 2024, with senior housing volumes continuing to trend below historical norms. After a brief uptick in the third quarter, volumes dropped once again in the fourth quarter, showing persistent lender caution toward new development. The number of senior housing units under construction remained near decade-low levels, reflecting ongoing hesitancy driven by cost pressures and overall economic uncertainty.

In nursing care, construction lending showed its first sign of life in over seven quarters, with a modest $38 million in volume recorded in the fourth quarter. While activity remained very limited, even this small uptick signals a marginal thaw in what has long been a stagnant development pipeline, although it remains consistent with pre-2020 levels where new construction was historically minimal. Despite recent interest rate cuts, lenders and developers appeared to be taking a conservative stance in 2H 2024, with most new capital directed toward existing assets rather than ground-up projects.

Senior Housing Delinquencies Eased Further as Nursing Care Shows Signs of Peaking

Delinquency rates for senior housing continued their downward trajectory in 2H 2024, marking five consecutive quarters of improvement since peaking in the third quarter of 2023. By year-end, delinquencies had fallen to 2.6% of total loans, well below earlier levels. (Note: loans in forbearance are included in the delinquent loan data for some debt providers, slightly influencing these figures.)

In contrast, nursing care delinquency rates remained relatively elevated through much of the year but showed a meaningful decline in the fourth quarter (1.6%), suggesting they may have peaked in the second quarter (2.7%). Despite this late improvement, the nursing care sector still faces notable financial strain, underscored by $98 million in reported foreclosures in 2H 2024 compared to $26 million for senior housing.

Download the complimentary 2H 2024  NIC Lending Trends Report for full details on these and other trends in senior housing and skilled nursing lending. 

Note: This data is not to be interpreted as a census of all senior housing and skilled nursing lending activity in the U.S. but rather reflect lending activity from participants included in the survey sample only. 

The NIC Lending Trends Report for the first half of 2025 is scheduled for release in December.

Interested in participating? The NIC Lending Trends Report helps NIC Analytics deliver on NIC’s mission to enable access and choice by further enhancing transparency of capital market trends in the senior housing and care sectors. We very much appreciate our data contributors. This report would not be possible without them. 

If you would like to participate and contribute your data to future lending trends surveys, please contact us at analytics@nic.org. As a courtesy for providing data, data contributors receive this report before publication on the website. The information provided as part of the survey will be kept strictly confidential. Individual answers will be combined with all other responses. Data acquired from this survey will only be reported in the aggregate, and therefore, the resulting aggregated data will not be attributed to you or your company upon distribution. 

Data from the recently released 1Q 2025 NIC MAP Actual Rates Report show that: 

• Independent living properties continued to report strong year-over-year rate growth across all rate categories in the first quarter of 2025. Between December 2024 and March 2025, in-place rates rose 0.7 percentage points (pps), pushing annual growth to a record-high 10.8%. Initial rates increased 1.6pps during the same period, with a year-over-year growth rate of 14.3% in March 2025, the second highest on record.
• In contrast, assisted living properties experienced a deceleration in the pace of rate growth across all rate types. Year-over-year growth in March 2025 fell to 1.2% for initial rates, 3.2% for asking rates, and 4.0% for in-place rates, the slowest pace recorded since 2021.

In 1Q2025, discounts between asking and initial rates remained largely unchanged from the previous quarter for both independent living and assisted living properties.

• For independent living properties, initial rates in March 2025 were 6.1% (or $271) below asking rates, equivalent to a 0.7-month discount on an annualized basis, unchanged from December 2024.
• For assisted living properties, discounting widened slightly. As of March 2025, initial rates averaged 9.1% (or $611) below asking rates, translating to a 1.1-month discount on an annual basis.

Additional key takeaways are available to NIC MAP subscribers in the  full report.   

About the Report: The NIC MAP Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,500 properties across the U.S. operated by over 50 senior housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as a requirement for participation is restricted to operators who manage 5 or more properties. Visit the NIC MAP website for more information.

The senior housing and care sector is ripe for growth, driven largely by the significant aging demographic hitting the U.S. daily. This growth will require committed capital partners, not only in the form of ongoing support from existing sources of capital, but with new and emerging financial partners. For the past year, NIC has focused time on educating and engaging with Family Offices who, on average, invest roughly 15-20% of their assets in real estate holdings.

A formal “Family Office” is an entity that provides services to manage the wealth and interests of ultra-high-net-worth individuals and families, typically across multiple generations. It is estimated that there are nearly 3,200 Family Offices in North America, a figure which is projected to grow to nearly 4,200 by 2030, accounting for about 40% of the Family Offices globally.¹ At the same time, wealth held by these North American institutions is forecasted to hit $4 trillion by 2030.¹

While these entities have great wealth to deploy across various investments, it is important to understand the nuances of Family Offices. Awareness of these unique characteristics will best position senior housing organizations for a potential investment and long-term relationship. 

1. An estimated 68% of Family Offices in this country have been established since the year 2000.² This means that they are still evolving and working toward greater institutionalization. Family Offices learn from one another and may often work in collaboration, whether in forming multi-family offices or perhaps simply partnering for investment opportunities.
2. The space is fragmented and can be difficult to navigate. This may mean making connections with these individuals and entities can be a challenge.
3. As one Family Office expert noted at a recent conference, “Just because you have a lot of money doesn’t mean you know how to invest.” These high-net worth individuals and their families often look to trusted investment advisors to invest and manage their funds. This means that relationships often need to be made with the advisors as well as family members.
4. Trust is paramount. These individuals and entities can be guarded for obvious reasons, and many have been burned in the past with ill-informed investments. It is important to spend time developing the relationship and fostering that trust, understanding that Family Offices are not necessarily going to invest right after meeting you. This means that this type of capital requires a long-term commitment.
5. Wealth preservation is a high priority for Family Offices. This means more patient capital, which can be a good thing for the senior housing sector.
6. Education will be needed. Compared to other commercial real estate property types, senior housing is more operationally complex. It is your responsibility to fully educate potential partners on the nuances of this space and potential risks. Senior housing continues to be seen as an alternative asset class and most Family Offices, even those with real estate investment experience, will not be familiar with the sector. Spend the time needed to ensure alignment and an educated investor, which will better position the relationship for long-term success.
7. It is important to note that the opportunity for Family Office investment goes beyond real estate. Many of these individuals have built fortunes on operational-intensive companies not solely based on real estate. This offers a potential emerging type of capital investment in our sector.

NIC is continuing to commit resources to capital formation activities and is developing additional resources to help others in the sector educate potential future investors. Stay tuned in the coming months for releases of many of these additional resources. If you have questions about this target audience, you can reach out to me at lmccracken@nic.org.

Sources:

¹Defining the Family Office, 2024. Deloitte
²Diamond Wealth

How Does Active Adult Differ from Traditional Senior Housing?

NIC MAP tracks age-eligible, market-rate, multifamily rental properties focused on enhanced lifestyle programming without providing meals. These communities are designed for older adults who are ready to downsize to a maintenance-free lifestyle, but who do not yet need the services and care provided in traditional independent living communities.

As of the first quarter of 2025, NIC MAP tracked nearly 800 active adult rental properties totaling approximately 118,000 units, a much smaller market size than the approximately two million senior housing units that NIC MAP tracks. With a median unit count of 138, active adult rental communities are comparable to traditional independent living’s median of 144 units, although the size of the units is typically larger within active adult. With a median age of less than 10 years old, active adult communities are generally newer than traditional independent living communities, which have a median age of 21 years¹.

Stabilized Properties Are Nearly 96% Occupied on Average

NIC MAP in the first quarter of 2025 began reporting a time series of quarterly occupancy rate trends. At 95.6% in the most recent quarter, stabilized average occupancy rates have been above 95% for three consecutive quarters. The average all properties occupancy rate – which includes properties open less than two years – has also been robust, ranging from 92% to 94% over the most recent four quarters.

What Rental Rates Are These Active Adult Communities Charging?

NIC MAP reports median average monthly rents (AMR) by metro area. Within the largest 31 Primary Markets tracked by NIC MAP, Miami ranks highest at a median of nearly $3,500 per month, followed by Portland, Chicago, Washington, DC, and New York as the remainder of metro areas with median AMRs above $3,000. The next five highest median AMRs are clustered around $2,500 in Boston, Seattle, Philadelphia, San Antonio, and Denver.

Deepen your knowledge of the Active Adult sector by attending NIC Academy’s first-ever Active Adult Boot Camp on Wednesday, September 10, 2025, in Austin, TX. This full-day session, held in conjunction with the 2025 NIC Fall Conference, provides a comprehensive introduction to Active Adult, offering both foundational knowledge and hands-on learning. Register today!

What is Driving Demand for Active Adult Rental Communities?

The fastest-growing group of renters in the U.S. are those aged 65–74², reflecting broader demographic shifts as the baby boomer generation ages. There is also a notable rise in “gray divorce” (divorces among those aged 50 and older) and solo aging, both drivers of demand for active adult rental communities. Additionally, the boomer generation in recent years has become the wealthiest in terms of median net worth, further fueling demand for high-quality properties with resort-like amenities.

Most Popular Amenities Focus on Lifestyle and Wellness

The most popular amenities in active adult rental communities include fitness centers, pools, clubhouses, and activities coordinators, illustrating residents’ strong interest in lifestyle, engagement, and wellness. NIC MAP’s Primary and Secondary Markets share nine of the top 10 amenities, with personal storage ranking within the top 10 amenities in the largest 31 Primary Markets tracked by NIC MAP, while salons and spas rank within the top 10 amenities in the 68 Secondary Markets.

Room for Growth

Looking ahead, the active adult rental market is still in its early stages. Penetration rates are well below those of traditional senior housing, indicating potential opportunity for further development depending upon the market and submarket. Investors and developers should conduct in-depth research and ensure thorough due diligence when entering a new market, striving to keep lifestyle and engagement at the core of lease-up and operations.

^[1] ASHA The State of Seniors Housing, 2024

^[2] Census Bureau