Business
The senior living market can’t keep up with demand as boomers age

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
Senior living has long been a somewhat under-the-radar real estate play, with a somewhat unappealing reputation. But it’s on the edge of a boom — a baby boom, to be exact.
More than 4 million boomers will hit 80 in the next five years, and occupancy at both active adult and assisted living communities is already rising fast. This comes as annual inventory growth in senior housing just dropped below 1%, the first time that’s happened since the National Investment Center for Seniors Housing and Care began tracking the metric in 2006.
Ventas, a senior living real estate investment trust with a $31 billion market cap, is betting big on what CEO Deb Cafaro calls the longevity economy.
“We’re buying billions of dollars a year in senior living, and we’re seeing returns in the sevens going in, with low to mid-teens, unlevered IRRs [internal rates of return], so there’s significant growth in assets, and we’re buying below replacement costs,” said Cafaro, who has been at the helm of the company for over 25 years. “I’ve never seen that combination of investment characteristics in my long career in real estate, and so we’re fully taking advantage of all of that.”
Cafaro said growth in the senior living demand pool is expected to be 28% over the next five years. She called the demand tailwinds “incredibly strong and durable.”
“Think about 2000 in the real estate investment trust business — office was over 20% of the overall REIT pie, and health care was 2%. Now when you look at the pie, office is 5%, and what is it now? It’s health care, senior living. It’s data centers. It’s cell towers. Why? Because that’s where the demand is,” she said.
Cafaro said Ventas, which purchases properties but doesn’t develop them, benefits from the deep lack of supply in the senior living sector, from active adult to assisted living to memory care facilities.
The Sunrise of Lincoln Park senior living community, owned by Ventas, in Chicago, Illinois.
Courtesy of Ventas
“As an owner with one of the largest footprints of senior housing, of existing stock in the U.S., we’re benefited by the higher cost of development, because we have an installed base and we’re acquiring assets actually at below replacement cost, and, right now, that’s part of our strategy,” Cafaro said. “We feel really good about our base of 850 senior living communities, where occupancies are increasing. And we also feel good about the multibillions of dollars we’re investing every year in existing assets.”
Why no supply?
Aegis Living is a developer and operator of senior living facilities in Washington, California and Nevada. The massive supply-demand imbalance weighs heavily on its founder and CEO, Dwayne Clark.
“There’s a problem brewing, and the only metaphor I can think of, it’s like putting a party balloon on the end of a fire hose and watching it increase with great velocity. Velocity without being able to do anything until it pops,” Clark said.
According to NIC data, there will be just about 4,000 new senior living units developed this year and next year, but demand growth would necessitate 100,000 new beds each year through 2040.
“It’s the lowest amount of units we’ve seen since 2009, the lowest. And, again, I’ve done this for 40 years. I’ve never seen such a lack of construction starts,” Clark said.
Average rents at Aegis are around $12,000 a month, but that includes utilities, transportation, food, activities and differing levels of care. Clark said most residents are covering costs in part by using the proceeds from the sale of their homes, which have appreciated dramatically in the past five years.
Higher interest rates, he said, are the primary roadblock to new development.
“We have six buildings waiting to get refinanced. We never, in our 28-year history, have had more than two. We’ve got six, and soon to be seven, and it’s all on floating debt. So that is a catastrophic problem for the industry. And again, we’re not catching up with the demand,” he said.
Investor interest
Harrison Street is an alternative real estate investment management firm with $55 billion in assets under management. Its U.S. Core Senior Housing strategy posted a more than 30% increase in same-location net operating income last year, according to a company spokesperson. Harris Street has maintained that with new supply constrained and demand durable, this could be the strongest entry point for alternative real estate investment in its 20-year history.
“Frankly, over the course of the past 20 years, I can’t identify another period where we were more excited about the current setup within the sector,” said Mike Gordon, global CIO of Harrison Street, which invests in the independent and assisted living segments, as well as memory care.
Gordon said severe uncertainty in the first years of the pandemic — when there were horror stories of infections and fatalities in senior living facilities — has largely been resolved. He said now more seniors are living in these communities than there were pre-Covid.
Harrison Street acquired about 20 senior communities during 2020-2021, at the start of the pandemic, when there was virtually no liquidity in the sector. Over the past few years, growing demand and tight supply have resulted in annual average rent increase of nearly 5% across the sector and high single digits in certain markets, according to Harrison Street.
Despite high interest rates overall, Gordon said private investors have new interest in the sector, thanks to that strong rent growth.
“What we’re seeing right now is a real quick return of liquidity into the sector,” Gordon said.
Business
ICAI in talks to provide data for sovereign AI – The Times of India
Business
Paraguay – the Silicon Valley of South America?

Jane ChambersBusiness reporter, Asunción, Paraguay

Gabriela Cibils is on a mission – to help turn Paraguay into the Silicon Valley of South America.
When she was growing up in the landlocked country, nestled between Brazil and Argentina, she says the nation “wasn’t super tech focused”.
But it was different for Ms Cibils, as her parents worked in the technology sector. And she was inspired to study in the US, where she got a degree in computing and neuroscience from the University of California, Berkeley.
After graduating she spent eight years working in Silicon Valley, near San Francisco, with roles at various American start-ups.
But rather than staying permanently in the US, a few years ago she decided to return home to Paraguay. She’s now helping to lead efforts to build a large and successful tech sector that puts the country of seven million people on the world map – and attract some of the globe’s tech giants.

“I saw first hand the impact that technology can have on your life,” says Ms Cibils. “After being exposed to such a different world [in Silicon Valley], it’s my responsibility to bring that mindset back and combine it with the talent I see in Paraguay.”
She is now a partner at global technology and investment firm Cibersons, whose headquarters is in Paraguay’s capital Asunción.
While most countries would love to build a world-class tech sector, Paraguay has a distinct advantage in one regard – an abundance of cheap, green electricity.
This is thanks to 100% of its generation now coming from hydroelectric power.
This is centred on the giant Itaipu Dam on the Paraná River, which forms part of the border between Paraguay and Brazil. This huge hydroelectric power station, the largest in the world outside of China, supplies 90% of Paraguay’s electricity needs, and 10% of Brazil’s.
In fact, such is Paraguay’s surplus of electricity that its electricity prices are the lowest in South America.
And it is the world’s largest exporter of clean energy.
The Paraguayan government hopes that the country’s abundance of cheap, green electricity will attract global tech firms increasingly focused on the massive energy demands of AI computing.
“If you want to install any technology investment like AI data centres, keep in mind hydroelectric power is both renewable and steady,” says Paraguayan software development entrepreneur Sebastian Ortiz-Chamorro.
“Compared to other renewable energy sources like wind or solar, that have their ups and downs, it’s much more attractive for creating data centres or any other electro intensive activity that requires a steady electricity source.”
He adds that in addition to Itaipu, and Paraguay’s other large state-owned hydroelectric plant, the Yacyretá Dam, private companies can easily build their own smaller facilities.

On a visit to California last year Paraguay’s President Santiago Peña spoke with companies like Google and OpenAI to encourage them to invest in Paraguay. It remains to be seen if such industry giants open large operations in the country.
Minister of Technology and Communication Gustavo Villate is working closely with the president on the continuing efforts.
“We have the youngest population. We have a lot of renewable green energy. We have low taxes and economic stability,” he says proudly.
I’m taken on a tour with the minister of a planned new digital park near Asunción’s main airport. It’s currently green fields and some army barracks.
Mr Villate unfurls plans to show off the lakes, a childcare centre and other buildings which he says should be ready in under two years.
“The government are going to invest around $20m (£15m) for the first stage, but the idea is for private companies to invest the rest,” he says.
Even though the park isn’t ready yet, Mr Villate says the collaboration already happening between the public, private and university sectors is key to building an ecosystem to attract foreign investors.
The government thinks the country’s young population will be a key attraction, and able to provide a large tech workforce. The average age in Paraguay is 27.

But more young people will need to be trained. The technology minister says the new digital park will also be home to The University of Technology, which is a joint venture between Taiwan and Paraguay.
Meanwhile, there are other initiatives to train young people in the country. “We are working really hard to create a mass of software engineers, programmers and everything you need to provide software services,” says Vanessa Cañete, president of trade group Paraguayan Chamber of the Software Industry.
Ms Cañete says she is also passionate about encouraging more women to study computer engineering. In 2017 she set up Girls Code, a non-profit association which aims to close the tech gender gap.
It organises programming and robotics workshops for teenagers and young women, with more than 1,000 receiving some sort of training to date.
Ms Cañete adds that software developers are also given English lessons for up to four years to improve their communication with overseas firms.
The people I met are brimming with positivity about what Paraguay has to offer the tech world, but they are also pragmatic.
Ms Cibils says there are still “growing pains” for foreign investors, with issues like bureaucracy, which can hold things up adapting local contracts to standardised international ones.
But she is adamant that “if you put innovation at its core and leverage all the benefits that the country has I think Paraguay can be a superpower”.
Business
Five carmakers go on trial over emissions cheat claims

Emer MoreauBusiness reporter

A major lawsuit against five leading carmakers accused of cheating on emissions tests is set to begin at the High Court on Monday.
The trial is the latest chapter of what has become known as the “dieselgate” scandal, with the companies facing allegations they used software to allow their cars to reduce emissions of harmful gases under test conditions.
Lawyers say the case is the largest class action in English and Welsh legal history, and could eventually involve 1.6 million car owners.
The five carmakers – Mercedes, Ford, Peugeot/Citroën, Renault and Nissan – all deny the accusations.
The five have been chosen by the court as lead defendants to be tried first as the case is so big.
Mercedes, Ford, Peugeot/Citroën, Renault and Nissan have been accused by 220,000 car owners of misleading them over emissions tests.
But depending on the outcome of this case, nine other carmakers are facing similar claims.
The dieselgate scandal first emerged in September 2015, when the US Environmental Protection Agency accused Volkswagen of installing software – known as “defeat devices” – on diesel cars to lower readings of the cars’ nitrogen oxide emissions.
In 2020, the High Court ruled that Volkswagen had used defeat devices in breach of European Union rules to pass emissions tests.
Volkswagen settled a class action out of court, paying £193m to 91,000 British motorists.
The company has so far paid out more than €32bn (£27.8bn) over the scandal, mostly in the US.
The High Court will decide whether systems installed in diesel cars by the five carmakers were designed to cheat clean air laws.
It is alleged the “defeat devices” allowed a car to identify when it was in a test scenario. It would then run its engine at below normal power and performance levels in order to record lower readings of nitrogen oxides.
Lawyers for the motorists will claim they were deceived about how environmentally friendly the vehicles were, and that the cars still on the road are continuing to emit dangerous levels of pollution.
Although the trial begins on Monday, a judgement is not expected until summer 2026. If the court finds against the carmakers, a further trial to determine levels of compensation is expected to begin in autumn 2026.
Martin Deigh of Leigh Day, which is one of the 22 law firms representing drivers, said: “A decade after the Dieselgate scandal first came to light, 1.6 million UK motorists now get their chance to establish at trial whether their vehicles contained technology designed to cheat emissions tests.”
He said that if the allegations against the car firms are upheld in court it “would demonstrate one of the most egregious breaches of corporate trust in modern times”.
“It would also mean that people across the UK have been breathing in far more harmful emissions from these vehicles than they were told about, potentially putting the health of millions at risk.”
The companies involved have said the claims against them are without merit.
A spokesperson for Mercedes said the mechanisms used in tests were “justifiable from a technical and legal standpoint”.
Renault and Stellantis, which owns Peugeot and Citroen, said the vehicles it sold were compliant with regulations at the time.
Ford said the claims had “no merit” and Nissan said it was “committed to compliance in all markets in which we operate”.
-
Tech7 days ago
I’ve Tested Countless Mesh Systems. Here Are the Routers I Recommend
-
Tech1 week ago
All Hail the Surprisingly Versatile Packing Cube! These Are Our Favorites
-
Tech1 week ago
AI in an ‘industrial bubble’ but will benefit society: Bezos
-
Tech1 week ago
Amazon Prime Big Deal Days Is Next Week, but We Already Found 40 Early Deals
-
Tech1 week ago
Amazon is overhauling its devices to take on Apple in the AI era
-
Tech6 days ago
Jony Ive Says He Wants His OpenAI Devices to ‘Make Us Happy’
-
Business1 week ago
Investors are packing up; Pakistan must ask why | The Express Tribune
-
Tech1 week ago
Combat Dry Indoor Winter Air With a New Humidifier