In today’s evolving senior housing landscape, one question continues to surface among investors: Where are the best opportunities—primary, secondary, or tertiary markets?
After nearly 30 years in this space, I can confidently say that secondary markets are where smart money is headed.
The Sweet Spot of Senior Housing Investment
Secondary markets strike the ideal balance—offering lower acquisition costs, strong, reliable demand from an aging population, and less saturation than primary markets. These mid-sized metro areas often have stable economic foundations, growing senior demographics, and a more favorable competitive landscape.
In contrast, primary markets are overheated. Everyone wants in, which drives up pricing and compresses yields. While they’re seen as “safe bets,” the return on investment often doesn’t justify the cost in today’s climate.
Tertiary markets, on the other hand, are still a gamble. While the entry prices may be attractive, they often come with challenges: insufficient healthcare infrastructure, staffing shortages, and inconsistent demand.
Why Investors Are Shifting to Secondary Markets
We’re seeing a notable shift among savvy investors looking for long-term value. Secondary markets offer:
- Stronger yield potential due to lower entry costs
- Steady demand driven by aging baby boomers
- Less competition, meaning more room to negotiate and operate profitably
- More favorable cap rates compared to primary markets
These markets allow you to build lasting value without the intense pressure of hyper-competitive environments. And with the right partners and operators in place, they can be just as reliable—if not more than their larger counterparts.
Bottom Line
While primary and tertiary markets have their place, secondary markets outperform when balancing risk and return. They’ve delivered consistent, solid results for our clients for decades—and right now they’re the smartest bet in senior housing investment.