It’s not just real estate—it’s regulated care.

Senior housing is one of the most compelling real estate sectors for long-term investors. It blends demographic tailwinds with income-generating assets. But it’s also unlike any other asset class—and with that uniqueness comes distinct risks.

Understanding these risks doesn’t mean avoiding the sector. It means knowing what to look for, mitigate, and monitor so you can invest wisely.

Regulatory Risk

Unlike multifamily or industrial assets, senior living communities are highly regulated. Assisted living, memory care, and skilled nursing facilities must comply with:

• State-level health regulations and inspections

• Licensing requirements for staff and facilities

• Safety, staffing, and emergency protocols

• Potential federal oversight (especially skilled nursing)

Mitigation tip: Partner only with operators that have a strong compliance record and experience navigating inspections.

Labor Market Pressure

Senior housing is labor-intensive. Communities need caregivers, nurses, aides, and administrators. Staffing challenges can lead to:

• Increased labor costs

• Burnout and turnover

• Reduced quality of care

• Lower resident satisfaction and occupancy

Mitigation tip: Invest with groups that emphasize caregiver recruitment, training, and retention strategies—especially in a tight labor market.

Operator Failure

Great real estate can underperform due to poor operations. A weak operator can cause:

• Occupancy to plummet

• NOI to shrink

• Regulatory penalties or even closure

Unlike self-storage or NNN retail, senior housing is operations-heavy. The operator matters just as much as the real estate.

Mitigation tip: Vet the operator’s experience, historical performance, and leadership team before investing. Haven only partners with high-performing, transparent operators.

Insurance Costs and Litigation Risk

Because care is involved, the sector faces higher insurance premiums and litigation exposure compared to traditional real estate.

• General liability and professional liability insurance is more expensive

• Frivolous lawsuits can still damage reputation and cost time

• Laws vary significantly by state

Mitigation tip: Ensure the community carries adequate liability insurance and legal reserves. Seek sponsors who include insurance reviews in due diligence.

Final Thoughts

Senior housing isn’t a low-risk, hands-off asset class. But with the right structure, operator, and oversight, it can outperform more conventional assets—while delivering real social value.