Public REITs have more than doubled their share of senior housing deals in the last three years, and they’re winning on speed as much as price.
REITs accounted for 36% of senior housing transaction volume, up from 15% in 2023, according to NIC MAP data cited in Walker & Dunlop’s 2026 Seniors Housing Outlook. Total volume reached $32.2B over the four quarters ending in Q2, up 74% year-over-year.
Private buyers still do most of the deals, but healthcare REITs like Welltower and Ventas, which have shifted from medical office into senior housing, are taking a growing share of the best assets. They’re doing it as occupancy across the 31 primary markets that NIC MAP tracks hit 90.4% in the third quarter and new development stays scarce.
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“One of the key drivers is that for the REITs, they often have a cost of capital advantage,” NIC Head of Research and Analytics Lisa McCracken said in a statement to Bisnow. “Right now, they are able to raise new equity and access debt on favorable terms.”
With few high-quality assets on the market, bidding has gotten more competitive. Beyond cheaper capital, REITs’ speed and relationships with owners and operators give them an edge.
“Where [private buyers] sometimes get beaten out is not so much on the economic terms, but it’s the other terms around the transaction, right?” JLL Senior Managing Director Jay Wagner said. “That speed of movement, speed to close. That’s been a significant competitive advantage for the REITs.”
Wagner, who helps oversee JLL’s senior housing group, said 60% of the senior housing deals his group has sold this year have gone to public REITs.
Welltower, which sold off 18M SF of medical office last year to focus on senior housing, had closed or put under contract $15.5B of investments this year as of late July, according to its Q2 earnings release. That included $6.2B across more than 30 transactions in the second quarter alone, about 96% of it sourced off market.
“Our advantage lies in the ability to identify value at a highly granular level, underwrite with conviction, and move with unparalleled speed when the facts support doing so,” Welltower Chief Investment Officer Nikhil Chaudhri said on the REIT’s Q2 earnings call in July.
Ventas completed more than $3B of senior housing investments across 27 transactions in the first half of the year, at an average of $358K per unit, which the company said was a significant discount to replacement cost, according to its Q2 earnings call.
REITs are also using relationships across the healthcare sector to land off-market deals.
More than 90% of Ventas’ investments this year were relationship-driven, including off-market deals, repeat sellers and existing operators, Chief Investment Officer Justin Hutchens said on the Q2 call.
“While interest in the sector continues to grow among both new and existing sources of capital, Ventas is demonstrating the power of our differentiated competitive approach,” Hutchens said. “Our relationships continue to be a defining advantage.”
Private buyers are still active but are shifting toward value-add deals after being priced out of core and core-plus assets, according to Walker & Dunlop.
“Due to the high and competitive pricing in the core and core plus segments of the market, private buyers are finding traction in value-add and could begin adding liquidity to that segment of the market alongside more institutional groups re-routing investment to that segment,” Walker & Dunlop Managing Director Michael Cregan said in a statement to Bisnow.
Cregan said private buyers are also pursuing smaller regional deals, partnering with institutional equity in joint ventures and selling stabilized assets.
While the investment market has become intensely competitive, development hasn’t caught up.
“When a market hits peak occupancy, yes, that can be a signal that new supply is needed,” McCracken said. “However, that is not enough in and of itself to trigger new development.”
About 16,200 senior housing units were under construction in NIC MAP’s primary markets in the third quarter, according to NIC. The pace of development is just 10% of what is needed to meet demand, at 10,445 units per year in the third quarter.
The development that is coming back is mostly luxury product, where rents can justify building, and projects in secondary and tertiary markets, where developers can save on design and amenities, according to Walker & Dunlop’s report.
Wagner said operators and developers are working to add supply, but it won’t arrive for years.
“Operators and developers are actively looking to rebuild development pipelines right now. But that is a very slow process,” Wagner said. “Most of them only have a very short handful of sites in their development pipeline. These are sites that need to go through entitlement, and need to have construction drawings done, and that can be a very lengthy process."
Ventas’ Hutchens said rents still aren’t high enough to justify much new construction.
“The reality is that there’s not a lot of projects that would pencil at this current time,” Hutchens said during the Q2 earnings call. “We’re a ways off from probably any big wave in development. There’s also just construction costs and availability of labor as well as debt and equity cost and availability of capital.”
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