SAN DIEGO — The senior living industry was in a different place a year ago, with decreased bank profits, loan losses and improved economic confidence. Fast forward to today and a new administration, priority shifts and rapid change have industry experts projecting enthusiastic optimism.

During the opening session of the 2025 NIC Spring Conference on Wednesday, a panel of industry thought leaders examined the current state of the senior living sector and forecast the trends shaping the remainder of this year and beyond.

For the past two years, “survive until 2025” defined a challenging period and hope for brighter days ahead, according to Lisa McCracken, head of research and analytics at the National Investment Center for Seniors Housing & Care. 

The COVID-19 pandemic created greater awareness of senior living, with previously uninterested investors showing interest in the sector due to its unique investment characteristics and positive returns. Senior living’s inclusion in the National Council of Real Estate Investment Fiduciaries, or NCREIF, expanded NCREIF Property Index, or NPI, last summer raised the visibility of the sector with investors, making it more difficult to exclude from investment portfolios.

“We’re on the radar, where we previously had not been before,” McCracken said. 

Now that 2025 has arrived, so has the light at the end of the tunnel, led by increasing demographic tailwinds fueled by the growing older adult population. And baby boomers, the oldest of whom are turning 79 this year, are ushering in winds of change with different expectations than previous generations for prevention, health and wellness.

Senior living developed a reputation during the financial crisis as recession-resistant, NIC MAP Vision CEO Arick Morton said. And the sector’s rebound from the difficult operating environment of the COVID-19 pandemic showed the sector was resilient, he added. Two major crises in the 2000s that were expected to adversely affect senior living actually showed that it was the best-performing asset class during that time, Morton said. 

Senior living has an “incredibly durable base of demand” and customer acceptance that held up despite the bad headlines and difficult operating environment during the pandemic, he said. 

Referencing NIC MAP Vision’s Senior Housing Outlook report, released last summer, Morton said he sees “staggering growth” coming, with the 80-plus demographic driving supply and demand over the next 20 to 30 years.

“This industry will have a pretty solid growth trajectory through the end of the century,” Morton said, adding that he sees 100% to 200% growth over the next 25 years. 

With the front end of the “aging wave” already here, Morton said, the COVID rebound has run its course, and historic absorption rates that continue to be seen every quarter are a function of simple supply-demand dynamics.

Despite an “incredibly bright future,” Morton said, the sector also faces a “pretty awesome challenge” in the form of an expected $1 trillion development shortfall by 2040, which means that not enough housing is coming online to meet the demand of older adults.

Tariffs against goods from Canada and Mexico could affect senior living construction at a time when the industry needs to develop two times the many units as it ever has developed, every year for the next 20 years, to meet demand, said Thomas Errath, Harrison Street managing director and head of research. He pointed out that lumber comes from Canada and dry wall comes from Mexico. Complicating matters for developers, he said, is the fact that planning needs to take place so far in advance.

Errath further discussed the macro factors for the industry in 2025:  the economy, inflation and rates, and Washington policy. 

Although he described the US economy as “incredibly resilient,” he said that consumers are feeling stressed, and everyone is feeling inflationary effects. Washington policy, he added, seems to change on a daily basis, which breeds uncertainty.

Regardless of those factors, Errath said, older adults still need senior housing. He said he sees the path forward for senior housing as “very bright” because of its underlying fundamentals, capital markets and investors embracing the industry. 

“I don’t see this train stopping,” Errath said. “Too many fundamental drivers suggest everything will continue to get better.”

Also at the conference:

The conference continues through Friday.