Market Summary 9.29.25

How Baby Boomers Are Transforming the CRE Landscape

The aging of the baby boomer generation is transforming commercial real estate demand, particularly in healthcare and senior housing. As millions retire, the need for medical office space, outpatient care facilities, and assisted living communities is climbing steadily, supported by data showing doctor visits rise sharply as people age. Assisted living occupancy has already increased for nine consecutive quarters, underscoring the demographic tailwinds pushing this sector forward. At the same time, the broader labor market faces a “brain drain” as boomers exit the workforce, heightening challenges for industries reliant on skilled labor, including construction and healthcare.

However, the impact on development and investment is nuanced. While demand for senior housing and medical properties is robust, new supply has been constrained by labor shortages, construction costs, and financing challenges. This has created a gap between demographic-driven demand and the industry’s ability to deliver new facilities. For investors, the situation presents both risk and opportunity: the mismatch may support rent growth and occupancy gains in existing properties, but slow the pace of new development.

Looking ahead, the “great wealth transfer” from boomers to younger generations is expected to release substantial capital into the market, some of which may flow into commercial real estate. This infusion could help fund needed projects, particularly in healthcare and senior living, while also providing liquidity in other asset classes. Local regulations, cost structures, and financing conditions will remain critical factors in determining how quickly new supply can catch up to growing demand.

For investors, the demographic shift offers a strategic opening. Targeting assets with resilient demand drivers—such as medical office, senior housing, and necessity-based retail—could provide durable cash flows and long-term growth. Acting early may allow investors to capture opportunities before heightened competition and rising capital flows drive valuations higher, positioning portfolios to benefit from the demographic-driven reshaping of the CRE landscape.