Why Multifamily Investors Are Entering Seniors Housing: An Interview with Mark Myers

At first glance, multifamily and seniors housing have a lot in common. Both are residential real estate. Both generate rent and need to maintain occupancy. However, multifamily investors have historically not invested in the seniors housing market.

As demographic trends, constrained development, and improving property fundamentals draw more attention to seniors housing, multifamily investors are increasingly exploring opportunities in the sector.

Those same fundamentals are why Kiser Group has made seniors housing a growing focus of its investment sales platform. The firm has spent years building relationships with multifamily owners and investors, many of whom are now looking beyond conventional apartments for diversification and yield. Seniors housing creates an opportunity to serve those investors while expanding Kiser Group’s reach into a specialized asset class with strong long-term demographic fundamentals.

One year ago, Mark Myers joined Kiser Group as Partner and practice leader of its Seniors Housing team, bringing decades of experience across seniors housing brokerage, operations, asset management and institutional real estate investment. Since then, Kiser Group has continued to expand the practice, most recently adding Brooks Barton as Director.

Lee Kiser sat down with Mark to discuss what attracted him to the firm and what multifamily investors need to understand before entering the sector.

Lee: It’s hard to believe you’ve already been at Kiser Group for a year. What attracted you to the firm and the opportunity to spearhead this practice area?

Mark: Kiser Group had something that was very important to me: a relationship-driven approach to brokerage. Seniors housing is an incredibly relationship-oriented business. Owners, operators, and investors need advisors who understand not only what an asset is worth, but also who the right buyer or operating partner may be and how a transaction fits into their long-term strategy.

I saw an opportunity to combine Kiser Group’s established investment sales platform and investor relationships with my experience. Over the past year, we’ve been able to build on that foundation, grow the team, and execute transactions across the country.

Lee: You mentioned your experience in seniors housing, but for multifamily investors who may be less familiar with the sector, let’s start with the basics. What exactly is seniors housing?

Mark: Seniors housings is an umbrella term for several distinct property and business models.

Active adult communities generally serve residents 55 and older, with an emphasis on housing, amenities, and socialization.

Independent living adds services such as meals, housekeeping, and transportation.

Assisted living provides residents with additional support for daily activities, while skilled nursing serves residents who require more intensive medical care.

For investors accustomed to conventional apartments, those different models—and the operational complexity that comes with them—can create a steeper learning curve.

Increasingly, though, that complexity is attracting investors rather than deterring them.

Lee: What’s driving that increased interest from multifamily investors?

Mark: There are several factors coming together at the same time: demographic demand, constrained supply, improving property fundamentals, and the opportunity to diversify beyond conventional multifamily.

The most recognizable tailwind is America’s aging population. The long-anticipated “silver tsunami” is creating a steadily expanding pool of potential seniors housing residents.

Demand for conventional apartments can fluctuate based on employment, household formation and migration.

Seniors housing demand, on the other hand, is heavily influenced by age and, in higher-acuity settings, the need for care.

Lee: Does that make seniors housing demand more resilient than conventional multifamily?

Mark: It can. There are some important differences in the resident base.

Many seniors enter retirement owning a home. When they eventually transition into seniors housing, the equity accumulated in that home can provide a ready source of funds to pay for housing and care.

Residents are also generally less exposed to employment volatility than working-age renters. Retirement income, savings, home equity and, depending on the type of seniors housing, government reimbursement can all contribute to the sector’s relative resilience.

For multifamily investors looking to diversify that’s a compelling demand profile.

Lee: Strong demand is one side of the equation. What’s happening with new supply?

Mark: New supply is difficult to build, and that’s an important part of the investment story.

While America’s senior population continues to grow, seniors housing isn’t being built at the same pace as conventional apartments in many markets. Developing a seniors housing community is considerably more specialized than developing traditional multifamily.

Entitlements can be difficult. Construction has to account for accessibility and ADA requirements, specialized common areas, activity spaces, and depending on the property type, commercial kitchens, care infrastructure, and other operational needs. All of that makes projects expensive to build.

Financing has also become difficult to obtain, which further limits the number of projects that can move from planning to construction.

Lee: I’ve heard you say the pandemic affected that development environment. Tell me more about that.

Mark: COVID-19 effectively reset it. Instead of immediately returning to aggressive construction, the industry entered a period of more controlled development. That has helped existing communities absorb available inventory while the senior population continues to expand.

From an investor’s perspective, it’s an attractive real estate equation: growing demand meeting constrained new supply.

Lee: What are you seeing in terms of property fundamentals?

Mark: Limited development has contributed to improving fundamentals at existing seniors housing communities.

Occupancies have recovered significantly from pandemic-era disruptions, while rents have increased substantially. For owners of well-positioned communities, those trends can create meaningful opportunities to grow revenue and property value.

That’s particularly notable right now because conventional multifamily investors are dealing with slowing rent growth in many markets.

Lee: Does that mean seniors housing is insulated from today’s capital market challenges?

Mark: Seniors housing isn’t immune to those conditions. Financing acquisitions and developments remains challenging, and operating performance matters significantly more than it does in a conventional apartment building.

But that’s also part of the opportunity. Investors who are willing to understand the business behind the real estate can access a sector with different demand drivers and potentially higher yields than traditional multifamily investment.

Lee: You mentioned “the business behind the real estate.” Is that the biggest adjustment for a multifamily investor entering seniors housing?

Mark: It’s certainly one of them. A multifamily investor has to recognize that owning the building is only part of the equation.

A conventional apartment property’s performance largely revolves around rent, occupancy and expenses. Seniors housing is real estate plus operating the business inside the real estate.

That changes the investment model considerably. Most real estate investors partner with seniors housing operators.

Lee: So how does the relationship between the real estate investor and operator typically work?

Mark: Seniors housing ownership frequently involves a partnership between real estate capital and an experienced operator. In a typical structure, the operator may have a smaller ownership stake in the real estate and visa vera. The real estate owner typically has an ownership stake in the business.

That makes operator selection, performance, and alignment critical parts of the investment thesis.

Investors aren’t simply evaluating the physical property and market rents. They’re evaluating the potential of the underlying business and determining how the right capital structure, operator, and strategy can create additional value.

Lee: How has institutional capital changed the seniors housing market?

Mark: REIT investment has helped reshape the sector. As REITs and other institutional investors have expanded their seniors housing portfolios, seniors housing has matured as an institutional real estate asset class.

At the same time, private investors and multifamily owners are increasingly considering seniors housing as a diversification strategy.

Lee: What’s the takeaway for a multifamily investor who’s considering entering the sector?

Mark: Seniors housing shouldn’t be viewed simply as another form of multifamily. Investors need to understand both the real estate and the operating business.

But for investors seeking stronger demographic tailwinds and exposure to an asset class where both real estate and operational performance can create value, seniors housing is becoming an increasingly compelling place to look.

If you’d like to continue a conversation with Mark about seniors housing, you can reach him a mmyers@kisergroup.com.