Morgan Stanley expanded its senior housing portfolio with the purchase of three MorningStar Senior Living facilities around Denver for $305M.

Kayne Anderson Real Estate sold the properties, and MorningStar will continue to operate them, according to a press release announcing the sale.

The Denver Business Journal reported that the sale included MorningStar’s RidgeGate location, which sold for $105.8M. The community was built in 2015 and consists of 224 units on 5 acres in Lone Tree. Residences range from independent living to assisted living and memory care.

MorningStar, a Denver-based company, has 14 Colorado locations.

Will Milam, head of U.S. investments at Morgan Stanley Real Estate Investing, said in the release that demand for senior living is high and the company is predicting around 5% annual growth for the next five years.

Since Morgan Stanley Real Estate Investing started buying senior living properties in 2022, the company’s portfolio has grown to 30 communities and nearly 3,000 units across the country.

Morgan Stanley joins several other investors flocking to senior housing because of the rising demand from aging baby boomers.

An August Colorado Fiscal Institute report found that the number of residents over 65 will increase 30% by 2035, and most existing housing doesn’t meet the accessibility needs of the aging population.

Demand for senior housing is expected to outpace supply by more than 300,000 units nationwide within the next five years, according to NIC MAP, a data provider in the sector.

Kayne Anderson this week announced $2.5B in funding for future purchases driven by interest in the sector, while other companies like Town Lane and Clarion Partners also aim to amp up senior housing acquisitions.

In the Denver area, senior housing projects under construction include The Reserve at Cherry Creek, a NexCore Group development, and Forte at RidgeGate from Koelbel & Co.