The country's seniors’ housing deal market is poised for a record-setting year in 2026, owing to its underlying demographic growth and increasingly bullish sentiment among investors.
Cushman & Wakefield’s newly released Seniors Housing Market Overview reports that the sector is well-positioned to outperform other commercial property sectors this year, following the large sums of investment capital that flowed into the seniors housing market in 2025. A tipping point was reached in 2023, when Canada’s senior population outstripped the number of children in the country.
That trend, coupled with the expectation that seniors housing supply will remain constrained, should induce even greater private investment in the sector, according to the report.
“As a result, 2026 is expected to be a record year for seniors housing transaction activity in Canada,” the report said, in large part because income growth in the sector is beginning to offset upfront capital costs. That creates the "potential for improved valuation conditions going forward.”
Moreover, with Canadian baby boomers’ aggregate home equity estimated at $17 trillion in mid-2024, the private sector is primed to capitalize on surging demand from much of the country’s well-heeled aging population.
“That outsized growth among the aging Canadian population cohort is really going to drive user demand for seniors’ housing and long-term care,” Sean McCrorie, Cushman & Wakefield’s vice chair and leader of its Canadian seniors housing and healthcare practice group, told CoStar News. “Investors are finally starting to take note of that in a big way, and increasingly, I would expect to see seniors housing making headlines, alongside some of the more traditional commercial real estate assets."
Could reach 20% of activity
The public sector is typically involved in financing the long-term care component of seniors’ housing, while the private sector tends to focus on traditional retirement homes, assisted living and purpose-built memory care facilities, McCrorie said.
“Whereas, historically, seniors housing has been, maybe, 5% of the total commercial real estate market’s annual transaction activity, this year seniors’ housing will be upwards of 20% of the total market,” he said. “It really signifies a shift in the mindset of investors. Seniors housing is historically this niche cottage industry, but now it’s right up there with more-traditional asset classes like office, industrial, retail and multifamily.”
The timing may be auspicious, because the condo-construction nadir and record purpose-built rental completions in Toronto have put downward pressure on rental income in the multifamily sector, McCrorie said. Unlike traditional commercial real estate assets, however, seniors housing isn’t a passive investment.
“There’s a large component of the sector that’s operations-based, so unlike condos or even purpose-built rentals, where you build brick-and-mortar and it can be a somewhat passive investment, seniors housing is much more of an actively-managed asset class — quite a bit of the operating expenses are tied up in things like labour costs, or the cost of providing residents’ three daily meals, and housekeeping,” McCrorie said. “It’s an interesting product because there’s a residential component — as with apartments — but there are also hospitality and healthcare components involved.”
The sector’s supply-and-demand fundamentals are robust enough that Building Ontario Fund, a nascent Ontario government agency responsible for funding infrastructure projects, has already invested in five seniors housing developments across the province, expected to contain 924 beds. Toronto-based BOF works with institutional investors and Indigenous groups to close financing gaps and advance priority projects that are likely to yield profitability on their investments.
The Rekai Centres at Cherry Place in Toronto was BOF’s first investment in the sector, a $176.1 million construction loan affixed with customary conditions and in conjunction with the Ministry of Long-Term Care. Rekai is a non-profit, charitable corporation that owns and operates Cherry Place and Sherbourne Place in downtown Toronto.
Regions face different challenges
In conjunction with Manulife Invest, BOF also funded Arch Corp.’s four long-term care facilities in the rural communities of Amherstburg, Lancaster, Prescott and Tay Valley Township, by bundling them into a low-interest senior-debt financing facility.
According to BOF’s top executive, the cost of land is the preponderant impediment to building long-term care facilities in Toronto, whereas rural communities face a different problem.
“In more parts of rural Ontario, it’s the size of the homes that makes them tough to pencil economically,” BOF’s Michael Fedchyshyn said in an interview. “In Northern Ontario, it’s size, but also construction costs, which tend to be significantly higher than they are in Southern Ontario.”
That in tandem with the lower demand for seniors’ housing in smaller communities, the economics in two of Arch’s projects were completely unfeasible — even with provincial per-bed subsidies — while the remaining two “were just OK,” Fedchyshyn said.
However, part of BOF’s mandate is to remove risk associated with projects by earning returns on those in which it invests, rather than merely subsidizing them, and allaying any circumspection the private sector might have in the process. Fedchyshyn said the success of BOF’s investment decisions are intended to create scale by enticing private capital. That’s why it’s no accident that the agency’s first two investments were in the seniors’ housing sector.
“We’re designed to do a couple of transactions to understand what the root problem is and why it’s repelling the market, then try to de-risk them through policy changes or recommendations to change policies, or by demonstrating that those transactions can actually deliver a market return and deserve private investment,” Fedchyshyn said. “We really need the private sector to step up and help us. We can take that front-end risk and demonstrate how to get it done to solve problems like, in this case, providing homes for an aging population that’s rapidly coming down the pike.
"Between Rekai and Arch, that’s more than 900 homes, but there’s still a lot to do.”