Senior Living Investment in Denver
Denver's senior living market is tight. Baby boomers keep moving here for the lifestyle, and we haven't built enough beds to keep up. Cap rates sit in the 5.8% to 7.2% range, which looks good compared to the 4.5% you'll get on multifamily. Occupancy runs 88% to 94% across care levels. Private pay dominates, which means less Medicaid headaches. Staffing costs have stabilized after the 2024-2025 wage spike, but you still need 15% more budget than pre-COVID.
Market Context
Cap Rate Range
5.8% to 7.2% depending on care level and vintage. Memory care trades tightest at 5.8%-6.4%. Independent living ranges 6.2%-7.2%.
Current Vacancy
8% to 12% overall. Independent living runs 10%-12%, assisted living 8%-10%, memory care 6%-9%. New deliveries push these numbers up temporarily.
Rent Trend
Up 4.2% year-over-year. Assisted living leads at 5.1% growth, independent living at 3.8%. Memory care plateaued after big 2024-2025 increases.
Absorption
180-220 units absorbed quarterly metro-wide. Slower than 2023's 280 unit pace due to new supply hitting simultaneously.
Price Per Unit Trend
Independent living: $185K-$220K per unit. Assisted living: $210K-$275K. Memory care: $280K-$350K. Up 6% from 2025.
Transaction Volume
$340M in 2025, down from $485M in 2024. Fewer portfolio trades. Single-asset deals averaging $18M.
Submarket Analysis
Cherry Creek / Glendale
5.8%-6.3% capVacancy
7%-9%
Avg Rent (1BR)
$4,200 independent living, $5,800 assisted living
Premium market stays strong. Wealth concentration supports private pay rates.
OM Tip
Highlight proximity to Presbyterian/St. Davos medical corridor and retail amenities.
Highlands Ranch / Littleton
6.1%-6.8% capVacancy
9%-11%
Avg Rent (1BR)
$3,600 independent living, $5,100 assisted living
Suburban aging-in-place preference. Good fundamentals but more price sensitive.
OM Tip
Show drive times to major medical facilities. Presbyterian/St. Joe south campus proximity matters.
Boulder County
6.0%-6.6% capVacancy
8%-10%
Avg Rent (1BR)
$3,900 independent living, $5,400 assisted living
Limited new supply keeps occupancy strong. University retirees provide steady demand.
OM Tip
Boulder Community Health relationship important. Emphasize educated resident base.
Westminster / Thornton
6.4%-7.2% capVacancy
10%-13%
Avg Rent (1BR)
$3,200 independent living, $4,700 assisted living
Value play with more Medicaid mix. Absorption slower but cap rates attractive.
OM Tip
Break out payor mix clearly. Show path to private pay rate increases.
Lakewood / West Metro
6.2%-6.9% capVacancy
9%-11%
Avg Rent (1BR)
$3,500 independent living, $4,900 assisted living
Steady middle market performance. Lutheran Medical Center drives some healthcare demand.
OM Tip
Federal employee retirees provide income stability. Highlight this resident profile.
Performance by Vintage
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What Your OM Needs to Address
Care Level Financial Breakdown
Don't blend performance across independent living, assisted living, and memory care. Each has different unit economics.
Data to Include
NOI by care level, revenue per occupied room by acuity, move-in/move-out patterns by care type, waiting lists by service level
Colorado Medicaid Dynamics
State waiver program changes affect assisted living reimbursement. Current rates and pending adjustments matter for underwriting.
Data to Include
Payor mix percentages, Medicaid rate schedule, waiver bed allocation, private pay conversion rates
Staffing Cost Normalization
Labor costs spiked 35% from 2022-2024. They've stabilized but remain elevated. Buyers want to see sustainable wage structures.
Data to Include
Current wage scales by position, turnover rates, agency vs direct hire costs, benefits load, overtime patterns
State Licensing Compliance
Colorado Department of Public Health inspections and citation history. Recent regulatory changes on staffing ratios.
Data to Include
Last three inspection reports, citation remediation costs, staff-to-resident ratios by care level, administrator tenure
Denver Health System Relationships
Hospital discharge relationships drive referrals. Presbyterian, St. Joe, Rose Medical connections matter for census.
Data to Include
Referral source breakdown, discharge planner relationships, rehab therapy partnerships, physician group connections
Mountain West Competition Analysis
Phoenix and Salt Lake compete for same retiree demographics. Show why Denver market position holds.
Data to Include
Rate comparisons to competing markets, resident origin analysis, family proximity factors, lifestyle amenity access
Investment Outlook
Short Term
Next 18 months stay choppy. New supply in Westminster and Thornton pressures occupancy through 2026. Buyers remain selective but cap rate compression likely bottomed out.
Medium Term
2027-2028 fundamentals improve as construction pipeline clears. Denver's population growth advantage over Midwest markets becomes clearer. Expect 50-75 basis points of cap rate compression.
Long Term
Demographics win long-term. Colorado's 65+ population grows 45% by 2035. Limited developable land in core submarkets supports existing asset values. Climate migration accelerates.
Buyer Profile
REITs focused on private pay markets. Family offices with healthcare operating experience. Opportunity funds targeting value-add repositioning in secondary submarkets.
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