San Diego Business Journal

Senior housing is proving a strong investment in San Diego County, with demand higher than in nearly every other major market in the nation, according to a national organization that tracks housing for seniors who need some level of care.

Occupancy rates in San Diego for the first quarter of 2019 were 91.5 percent, said Beth Mace, chief economist for the National Investment Center for Seniors Housing and Care.

That’s an ever-so-slight dip from 2018, when occupancy rates finished the year in San Diego County at 92.2 percent, second highest in the country among the 31 metropolitan areas surveyed.

The highest was San Jose, which had an occupancy rate of 94.1 percent for 2018.

Nationwide, the occupancy rate for the first quarter of 2019 was 88.1 percent.

“The investment returns are pretty high for senior housing compared to other types of assets,” Mace said. “What we found since we’ve come out of the recession, we’ve seen a fair amount of new capital being put into senor housing, especially senior assisted living.”

In general, investors have been responding by building more, although construction seems to be slowing and San Diego is bucking the trend with little new senior housing projects coming to market, Mace said.

‘It’s just a lot harder to get anything built in California. There’s a lot more growth restrictions,” she said.

The crunch could come in about 10 years, when baby boomers who are in their 60s enter their 80s, Mace said, adding that 83 is the average age of someone living in senior housing that offers some assistance.

Considering how long it takes to build in California, some investors are starting to look at what Mace called “the demographic wave” that’s coming.