RMR Group Outlines Senior Housing Strategy as Baby Boomer Demand Accelerates

RMR Group has outlined a strategy for capturing value in the senior housing sector, citing a convergence of surging Baby Boomer demand and historically constrained supply as the primary drivers of opportunity across U.S. markets.

In a market commentary published April 23, 2026, Chris Bilotto of RMR Group described the current environment as a favorable setup for investment managers and property owners who can pair disciplined capital allocation with superior operational execution. The piece, titled "Senior Housing's Second Act: Capturing the Next Wave of Value," reflects RMR Group's asset management philosophy for the senior living sector.

Supply Constraints Meet Accelerating Demand

According to RMR Group, the 80-and-older population — described as the core driver of senior living utilization — is projected to grow approximately 4.1% annually over the next 15 years, more than double the overall U.S. population growth rate. The firm cited data from NORC at the University of Chicago, the Organization for Economic Co-Operation and Development, and NIC Map Data Service in primary and secondary markets as of the fourth quarter of 2025.

At the same time, inventory growth in the senior housing sector has been declining since 2018 and now sits near 0.6% annually, according to the commentary — well short of demographic growth. RMR Group attributed the supply shortfall to COVID-era construction disruptions followed by a sharp increase in development costs that rendered new projects uneconomical.

"The result is a favorable setup for outsized value creation as structural supply constraint meets accelerating demand," the commentary states.

Tailoring Pricing to Hyperlocal Markets

A central element of RMR Group's strategy involves tailoring pricing to hyperlocal markets, which the firm describes as a key lever for capturing value in the current cycle. The commentary outlines a dynamic rate strategy as one of four core execution priorities, alongside sales and marketing discipline, curated care plans, and strategic staffing.

RMR Group argues that senior housing is fundamentally a local business, with acuity levels, labor costs, and resident expectations varying dramatically by market. The firm says operators with strong local execution are best positioned to adapt service offerings and align rate structures with micro-market dynamics.

"Families are looking for specificity: care plans aligned with individual needs, delivered by teams who are deeply familiar with the local healthcare network," the commentary notes.

To support this localized approach, RMR Group says it partners with a diverse mix of national, regional, and local operators based on their proven execution capabilities and alignment with the specific needs of each market — rather than defaulting to the largest-scale platform.

Operator Diversification and Data-Driven Asset Management

RMR Group describes a diversified operator strategy as a mechanism for benchmarking and best-practice sharing across a portfolio. By analyzing performance data across different operators and markets, the firm says it can identify effective practices in sales, staffing, care bundling, and resident engagement, then work with operators to apply those insights where most needed.

The commentary also highlights the role of technology in driving operational leverage. RMR Group points to dynamic pricing tools, AI-enabled fall-detection systems, and digital care coordination platforms as examples of technologies that can improve resident outcomes while enhancing efficiency.

RMR Group manages senior housing assets on behalf of clients including Diversified Healthcare Trust (Nasdaq: DHC), a publicly traded real estate investment trust. The firm says its role as investment manager is to implement disciplined capital allocation and operational principles on behalf of property owners it represents.

Platform Scale and Multi-Sector Disciplines

As a multi-asset-class manager, RMR Group says it imports disciplines from other real estate verticals — including development, facility engineering, and capital expenditure governance — to its senior housing portfolio management. The firm argues that centralized procurement, standardized compliance workflows, and portfolio-wide contracts create cost and speed advantages without imposing a one-size-fits-all approach.

RMR Group's commentary identifies several metrics it considers markers of success in the current environment: sustained occupancy recovery meeting or exceeding submarket benchmarks, above-market effective rent growth driven by localized revenue management, increasing operating leverage from platform efficiencies, and durable net operating income growth.

"Success will come not from a single strategy, but from the selective deployment of this platform scale combined with the empowerment of local experts to tailor services and pricing to the unique demands of their market," the commentary concludes.

Sources

RMR Group, "Senior Housing's Second Act: Capturing the Next Wave of Value," April 23, 2026. https://www.rmrgroup.com/perspectives/senior-housings-second-act-capturing-the-next-wave-of-value/