Institutional investors are showing much stronger appetite for seniors housing as the sector’s underlying conditions improve in the aftermath of the COVID-19 pandemic, says the head of Cushman & Wakefield’s Canadian healthcare practice group.

“It’s increased dramatically,” said Sean McCrorie, who specializes in seniors housing, told Connect in an interview.

C&W’s latest Seniors Housing Operator Performance report shows that the Canadian sector has moved beyond its post-pandemic recovery phase and entered a period of sustained growth. McCrorie noted that a report from the U.S.-based National Council of Real Estate Investment Fiduciaries illustrates that seniors housing outperformed all other real estate subtypes during the first half of 2025. The NCREIF tracks unleveraged returns covering a portfolio of real estate assets and has separate index for senior-housing assets.

Although the data applies mainly to U.S. properties, it has generated “a bit of a buzz” among Canadian investors, said McCrorie.

“I think it’s a sign of thing things to come, personally, that seniors housing will be in the mix to lead the pack of real estate asset types,” he added. “And because all these portfolio managers want to either meet or exceed their benchmark return, they’re positioning their portfolios to gain exposure to seniors-housing investments so that they can benefit from these trends.

“So, I think that’s a big factor from an investment perspective. Asset managers may potentially be decreasing [their portfolio] weighting to other forms of commercial real estate so that they can reallocate capital towards seniors housing, all of which is driving positive capital flows towards seniors housing as an asset class, which has been very supportive of pricing for seniors housing specifically.”

Market conditions indicate that the sector is ripe for more investment.

Across 17 surveyed markets, occupancy rose by 3.5 percentage points over the past year, reaching 91.5% in the second quarter of 2025, nearly matching pre-pandemic levels of 92%,” says the C&W report. Positive net absorption has been recorded in 16 of 17 markets since 2021, with Ontario’s Durham region holding steady.

According to McCrorie, the report’s lead author, the supply-demand dynamics underpinning the Canadian market remain highly compelling.

Overall investor interest has also picked up.

“Seniors housing has been receiving a fair bit of attention lately from investors,” said McCrorie. “Just generally speaking, whereas maybe 10-20 years ago seniors housing was a fairly niche asset class, I’d say investor acceptance of the asset class has increased fairly significantly over the last few years.

“So, I think that bodes well from an investment market perspective.”

Demographic tailwinds are expected to persist for the next two decades as the number of Canadians aged 75 and older accelerates, creating what McCrorie has described as a “structural wave of demand.” Concurrently, new development has declined to cyclical lows as they are constrained by higher construction costs and more challenging lending conditions.

Today, most Canadian seniors-housing projects are infill developments rather than new builds.

Meanwhile, national average rents increased between 3% and 6% year-over-year in 2025. C&W expects above-trend rent growth to continue, supported by declining vacancy rates and the limited new supply.

The firm has warned that labour availability remains a critical challenge. Still, C&W expects 2025 to be a record year for seniors housing dealmaking in Canada.

Photo: Courtesy of Cushman & Wakefield