Insights

Wilshire Finance Partners

2024-2025 U.S. Real Estate Market

This article covers key sectors of the U.S. real estate market where Wilshire Finance Partners is focusing its lending and investment initiatives, including Senior Housing, Behavioral Health, Medical Office Buildings (MOBs), Warehouse & Industrial, Self-Storage, Multifamily, and Student Housing, focusing on 2024 activity, 2025 forecasts, and lending and investment insights.

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Senior Housing Market Overview

2024 Senior Housing Market Activity

The senior housing market in 2024 demonstrated strong demand growth, driven by aging demographics and constrained new supply.

Occupancy and Rental Growth

• Occupancy Climbs

  • The national senior housing occupancy rate hit 87.2% in Q4 2024, marking its highest level in four years. This steady increase reflects the ongoing recovery from pandemic-related disruptions and highlights the growing demand for senior living options as baby boomers age into the market.

• Regional Performance

  • Tampa, FL, and other retirement hubs saw occupancy rates near 90%. These regions benefit from favorable climate, tax advantages, and established healthcare infrastructure, making them particularly attractive to retirees and senior living investors alike.

• Rental Rate Growth

  • Annual rental increases ranged from 6% to 10%, reflecting rising operational costs and strong market demand. Higher wages for staff, increasing insurance premiums, and elevated utility costs contributed to the upward pressure on rental rates, which operators successfully passed on to residents.

Investment Activity

• Institutional Capital Inflows

  • Investors focused on assisted living and memory care for stable, long-term returns. These segments offer resilience against economic downturns, driven by the essential nature of services provided and the specialized care needs of aging residents.

• Constrained Development

  • High construction costs limited new supply, allowing existing properties to capture rental growth. Labor shortages and rising interest rates have further delayed new projects, positioning existing communities to capitalize on sustained demand and favorable market dynamics.

2025 Senior Housing Forecast

The senior housing sector in 2025 is projected to grow⁴ as demand outpaces supply, particularly in middle-income housing.

• Demand Surge from Aging Population

  • By 2050, the 65+ U.S. population may exceed 82 million. The growing middle-income senior demographic is projected to drive demand for more affordable senior housing solutions, creating opportunities for innovative housing models and partnerships with healthcare providers.

• Investment Outlook

  • Investors may continue to target secondary markets and value-add opportunities. Markets with limited competition, favorable zoning laws, and strong local economies may attract increased attention, with a focus on repositioning underperforming assets to meet modern resident expectations.

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Behavioral Health Real Estate Market

2024 Behavioral Health Activity

The U.S. behavioral health sector expanded rapidly in 2024, supported by rising mental health awareness and increased investment.

• Market Valuation

  • The market reached $87.82 billion, with a 5.3% compound annual growth rate (CAGR) forecast through 2032. This growth is driven by increasing demand for services addressing anxiety, depression, and substance use disorders, as well as expanded insurance coverage and employer wellness initiatives.

• Facility Growth

  • Adaptive reuse of retail and office spaces into behavioral health clinics gained traction. This trend is fueled by the availability of underutilized commercial real estate and the need for accessible, community-based mental health services, particularly in suburban and urban areas.

• AI & Telehealth Integration

  • Providers adopted AI-driven tools and telehealth solutions for broader reach. AI is enhancing patient care through predictive analytics and personalized treatment recommendations, while telehealth reduces barriers to care for rural and underserved populations.

2025 Behavioral Health Forecast

The sector is projected to continue its focus on facility expansion and digital innovations in 2025, with strong investor interest.

• Investment Opportunities

  • Behavioral health properties are emerging as a recession-resistant asset class. As demand for mental health services remains high regardless of economic cycles, investors are increasingly drawn to facilities offering stable occupancy, strong reimbursement models, and potential for long-term appreciation.

• Tech-Enabled Mental Health Services

  • AI-based diagnostics may play a growing role in improving early detection and treatment outcomes. Innovations in natural language processing (NLP) and machine learning are helping clinicians monitor patient progress more effectively, while mobile apps and virtual care platforms improve patient engagement and continuity of care.

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Medical Office Building (MOB) Market

2024 Medical Office Building Activity

The medical office sector remained resilient in 2024, driven by healthcare demand and stable occupancy rates.

• High Occupancy

  • Medical office buildings (MOBs) maintained an average occupancy rate of 92.8%10. This stability reflects the sector’s essential nature and strong tenant retention, especially among practices specializing in primary care, orthopedics, and diagnostic imaging.

• Leasing Activity

  • Increased demand for specialty outpatient services fueled leasing growth. Providers focused on cardiology, oncology, and physical therapy have driven the need for larger, modern spaces closer to residential communities, reducing hospital dependency and improving patient convenience.

2025 Medical Office Building Forecast

The MOB sector is set for continued growth in 2025, driven by aging demographics and evolving healthcare technology.

• Outpatient Care Expansion:

  • More seniors seeking specialty care may increase demand for outpatient services. The growing 65+ population may require more frequent and diverse care, encouraging providers to expand into suburban markets and establish multi-specialty centers that offer comprehensive care in one location.

• AI Integration:

  • Many new facilities are being designed with telehealth and AI-driven diagnostic spaces. These technologies may optimize patient flow, enable remote monitoring, and enhance early detection capabilities, making facilities more efficient while meeting patient expectations for tech-enabled care.

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Warehouse & Industrial Market Overview

2024 Warehouse & Industrial Trends

After years of growth, the U.S. warehouse and industrial sector entered a moderation phase in 2024.

Supply & Demand Trends

• Increased Construction

  • 425 million square feet11 of new industrial space was delivered in 2024, driven by ongoing demand for logistics, e-commerce, and cold storage facilities. Despite signs of moderation, major distribution hubs and port-adjacent markets remained primary targets for new development.

• Rising Vacancy Rates

  • The overall vacancy rate rose to 6.6%, reflecting higher supply levels. With construction outpacing absorption, secondary and tertiary markets experienced the largest increases in vacancy, while core logistics corridors continued to show relative resilience.

• Stabilizing Rents

  • o Industrial rents averaged $10.04 per square foot in Q3 2024, with slower growth compared to prior years. While rent growth decelerated, it remained positive in high-demand sectors such as last-mile distribution, cold storage, and advanced manufacturing facilities.

2025 Warehouse & Industrial Forecast

The industrial market is projected to stabilize in 202512, with balanced supply-demand dynamics.

• Tech-Driven Warehousing

  • Automation and AI may reshape tenant requirements, focusing on robotics, predictive analytics, and smart inventory management systems. Facilities designed for advanced logistics operations may see higher demand as tenants prioritize efficiency and labor cost reduction.

• Regional Growth

  • The Sunbelt region may benefit from increased manufacturing activity, particularly in automotive, electronics, and renewable energy sectors. Proximity to growing populations, business-friendly policies, and improved infrastructure may continue to drive industrial expansion in markets like Dallas, Atlanta, and Phoenix.

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Self-Storage Market

2024 Self-Storage Market Activity

The U.S. self-storage market normalized in 2024 after several years of pandemic-driven demand spikes.

• Occupancy Stability

  • Occupancy rates remained at 90%13 throughout the year, reflecting a healthy balance between supply and demand. Despite a softening from pandemic-era highs, strong consumer demand for storage persisted, driven by life transitions, relocations, and small business usage.

• Rents Declined Slightly

  • Asking rents dropped 5.2% year-over-year, stabilizing by mid-year as new supply entered the market. While operators adjusted pricing strategies to maintain competitiveness, properties in high-density urban areas and Sunbelt states showed greater resilience in rental rates.

2025 Self-Storage Forecast

The self-storage market may see modest growth in 2025.

• Occupancy Rebound

  • Rates could increase 200–400 basis points by year-end14, supported by steady population growth and economic recovery. Renewed demand from downsizing retirees, remote workers, and small businesses may help boost occupancy in both urban and suburban markets.

• Technological Advancements

  • Smart access systems and virtual unit tours is projected to enhance the customer experience, improving security and convenience. Features like mobile app-controlled unit access, AI-driven occupancy monitoring, and online rental.

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Multifamily Housing Market

2024 Multifamily Market Activity

The U.S. multifamily market experienced supply-driven challenges in 2024, with rising vacancies and flat rent growth.

• Record New Supply

  • 440,000 new units15 were delivered, driving the national vacancy rate to 8%16, its highest level in a decade. The bulk of this new supply concentrated in luxury Class A properties, creating competition and softening rents in high-end segments, especially in urban core areas.

• Demand Rebounded

  • Absorption rose 70% year-over-year, signaling strong underlying renter demand despite oversupply. However, the recovery was uneven, with mid-tier and affordable properties maintaining stronger occupancy, while high-end units offered concessions to attract tenants.

2025 Multifamily Forecast

The market is projected to stabilize in 2025, with moderate rent growth17 and new supply tapering off.

• Affordability in Focus

  • Some developers are shifting toward workforce housing to meet the growing demand from middle-income renters priced out of luxury properties. Increased interest in public-private partnerships and tax incentives may further encourage the development of affordable and mixed-income communities.

• Regional Variationsbb

  • Sunbelt markets may struggle with elevated vacancy rates due to high concentrations of new supply, while secondary cities like Kansas City, Indianapolis, and Columbus may outperform. These cities offer more balanced supply-demand dynamics and continue to attract renters seeking affordable living options.

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Student Housing Market

2024 Student Housing Activity

The U.S. student housing market remained resilient in 2024, with strong pre-leasing and steady rent growth.

• High Pre-Leasing Rates:

  • By September 2024, 94.5% of beds18 were pre-leased, reflecting strong demand and limited new supply in key markets. Universities with stable or growing enrollment, especially in the Southeast and Big Ten regions, saw the highest pre-leasing activity.

• Rent Growth:

  • The average rent per bed rose to $99719, a 4.87%20 increase compared to the previous year. This steady rent growth was driven by increasing operational costs and the desire for modern, amenity-rich accommodations among students.

2025 Student Housing Forecast

The student housing sector may expand in 202521, driven by increased enrollments and institutional investment.

• Demand Growth:

  • Rising international student enrollments may boost occupancy, particularly at Tier 1 universities and institutions with strong STEM programs. The projected return of foreign students, along with higher retention rates, may create additional demand for off-campus housing options. It must be noted, however, that the impact of the Trump administration immigration polices and restrictions may have a major impact on the forecasted demand based on international student enrollment.

• Development Trends:

  • Focus on wellness-oriented, amenity-rich designs may continue to shape new projects, with features like fitness centers, study lounges, and outdoor social spaces becoming standard. Developers are also incorporating smart building technologies to enhance sustainability and improve the resident experience.

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Conclusion

This U.S. real estate article highlights the most significant trends and opportunities identified by Wilshire Finance Partners in its lending and investment initiatives for 2024-2025 across Senior Housing, Behavioral Health, Medical Office Buildings, Warehouse, Industrial, Self-Storage, Multifamily, and Student Housing.

Footnotes:

1. Source: National Investment Center for Seniors Housing & Care (NIC) Report. (2024). Quarterly Senior Housing Market Analysis, Q4 2024. Published by NIC, Bethesda, MD. (Referenced in: "87.2%")
2. Source: U.S. Census Data and Florida Real Estate Market Trends Report. (2024). Florida Housing Market Overview, U.S. Department of Housing and Urban Development. (Referenced in: "90%")
3. Source: National Senior Housing Rent Growth Analysis. (2024). Published by Senior Living Market Watch. (Referenced in: "6% to 10%")
4. Source: Senior Housing Market Forecast Report. (2025). Published by Senior Living Market Watch. (Referenced in: "The senior housing sector in 2025 is projected to grow")
5. Source: U.S. Census Bureau, Population Projections. (2024). Published by the U.S. Census Bureau. (Referenced in: "Demand Surge from Aging Population")
6. Source: U.S. Census Bureau, Population Projections. (2024). Published by U.S. Census Bureau. (Referenced in: "By 2050, the 65+ U.S. population may exceed 82 million")
7. Source: Behavioral Health Industry Outlook Report. (2024). Comprehensive Market Analysis for Behavioral Health Services, 2024-2032. Published by Behavioral Health Research Institute. (Referenced in: "$87.82 billion")
8. Source: Behavioral Health Industry Outlook Report. (2024). Published by Behavioral Health Research Institute. (Referenced in: "5.3%")
9. Source: Behavioral Health Market Insights, 2025. Published by Behavioral Health Research Institute. (Referenced in: "The sector is projected to continue its focus on facility expansion and digital innovations in 2025")
10. Source: Medical Office Buildings Annual Report. (2024). Outpatient Healthcare Facilities Market Trends. Published by Healthcare Real Estate Insights. (Referenced in: "92.8%")
11. Source: U.S. Industrial Real Estate Market Overview. (2024). E-commerce and Logistics Sector Report. Published by Industrial Research Group. (Referenced in: "425 million square feet")
12. Source: U.S. Industrial Real Estate Market Outlook, 2025. Published by Industrial Research Group. (Referenced in: "The industrial market is projected to stabilize in 2025")
13. Source: Self-Storage Association Quarterly Report. (2024). U.S. Self-Storage Industry Trends, Q2 and Q3 2024. Published by the Self-Storage Association, Alexandria, VA. (Referenced in: "90% throughout the year")
14. Source: Self-Storage Industry Forecast, 2025. Published by Self-Storage Association. (Referenced in: "Rates could increase 200–400 basis points by year-end")
15. Source: U.S. Multifamily Housing Report. (2024). Multifamily Construction and Vacancy Trends. Published by National Apartment Association. (Referenced in: "440,000 new units")
16. Source: U.S. Multifamily Housing Report. (2024). Published by National Apartment Association. (Referenced in: "8%")
17. Source: U.S. Multifamily Housing Outlook, 2025. Published by National Apartment Association. (Referenced in: "The market is projected to stabilize in 2025, with moderate rent growth")
18. Source: Student Housing Market Overview. (2024). Pre-Leasing Report, Q3 2024. Published by National Student Housing Council. (Referenced in: "94.5% of beds")
19. Source: National Student Housing Rent Growth Analysis. (2024). Published by Student Housing Market Research Group. (Referenced in: "$997")
20. Source: National Student Housing Rent Growth Analysis. (2024). Published by Student Housing Market Research Group. (Referenced in: "4.87%")
21. Source: Student Housing Market Outlook, 2025. Published by National Student Housing Council. (Referenced in: "The student housing sector may expand in 2025")