JLLUnited States|Spring 2022ResearchSeniors Housing & CareInvestorSurveyandTrendsOutlook BEEEeEEE旺E白Capitalmarkets• Interest in Seniors Housing swells as investors lookto alternative assets for growth and resiliency.: Q1 2021 saw an increase in Seniors Housing andnursing care transacticn volume for the firstquarter since the onset of the COVID-19 pandemic,and it was up 61% in Q4 2021.• Capitalizaticn-rate compression and priceincreases are expected with rising costs in Seniors. Rising interest rates and inflation remain top ofHousing.mind for many investors.. Market fundamentals have bounced back asMarketfundamentalsrestrictions lessen and demand tailwindspersevere.• Seniors Housing occupancy rates have reboundedfrom the lowest points seen due to the disruptionfrom the pancemic.• The pace of rent growth in Seniors Housingaccelerated through 2021 and is expected to• Primary and Sun Belt markets are experiencing thecontinue in 2022.highest concentration of new construction.Investorsentiment• Market participants grow more bullish on SeniorsHousing and Care investment, with 76% ofrespondents indicating that they intend toincrease their exposure to the sector in 2022.- 8o% of respondents indicated that we haveReport highlights2endured the worst of the pandemic and expectmarket fundamentals to improve. 11% ofCapital marketsrespondents say it's still too early to tell, whileanother 9% expect to see a cecline in propertyProperty markets7valuations and an increase in loan delinquenciesover the next 12 rmonths.Market outlook13• Most respondents indicated they expect SeniorsHousing capitalization rates to remain the samethroughout 2022, at 47%. Another 38% expectJLL Valuation Index14them to decrease.Investor survey results15Want more information?202|Seriors Housing&Care|Spring 2022 Investor Survey end Trends Outioo CapitalmarketsTransactionvolumepicksuptwoyearsafterinitialindustrydisruptionsAt the onset of the pandemic and through 2020,By 2021 year-end, volume had bounced back, upthe Seniors Housing and nursing care sector61% from Q1, to levels last seen at the close of 2019recorded its weakest transaction volume sincewhen the sector's performance was quite strong.2012. Investment volume was down 43% on a year-Seniors Housing assets in particular marked a strongover-year basis in Q4 2020. By the end of 2021,rebcund; nursing care investment volumes, whichhowever, this trend reversed substantialy as thecontinue to be beset by more operationalsector recovered from the depth of the pandemic-difficulties, saw a lesser rebound of 24% on a year-incluced pullback in investor demand. Q1 2021 wasover-year basis.the first quarter since the onset of the COVID-19pandemic to yield an increase in Seniors Housingquarter at S10.6 billion total, indicating a return ofinvestor interest.Rolling four-quarter transaction volume(Billions)$30100%%06$2580% Valume$2070%anjoA60%$1550%Portfolilio40%$1030%$520%10%sO0%1Q20083Q20104Q20111Q20132Q20144Q20151Q20182Q20193Q20204Q2021Seniors HousingINursing Care% PortfolioSource: NstionalInvestment Center for the Seniors Housing & Csre Industry, NIC MAP Q4 20215|Sericrs Housing & Care[Spring 2022 (vestor Suniej end Trerds Duticoi Price perunittrends lagging multihousingbutgrowthis emerging at a steadypaceAt year-end 2021, the average Seniors Housing pricecapitalization rates continued in the pre-pandemicper unit was just under S160,000, up 9% from itsdownward trend, reaching an all-time low of 4.59%.trough in Q1 2021 but still below the pre-pandemicpeak of roughly S180,000 per unit. AverageSeniors Housing and Care experienced increasedcapitalization rates for Seniors Housing transactionsoperating costs during the pandemic, mostlyremained stable at 6.4% from Q2 through Q4 2021, aattributable to PPE purchases and increased staffing50-basis-point increase from the beginning of 2020.costs. Operators are seeking to pass through higherSimilarly, nursing home unit pricing is recoveringthan typical rent increases in 2022 and beyond tofrom the pandemic dip, albeit at a choppier pace.recapture some of the erosion in profit margins thathas occurred. Further, investors are becoming moreAs a point of comparison, multihousing pricingwilling to underwrite occupancy, and NOl recovery,accelerated through 2021, reaching an all-time highleading to increased valuaticns for many Seniorsof $234,800 per unit in Q4 (on a trailing four-quarterHousing assets.basis), up 27% from year-end 2020. MultihousingRolling four-quarters price per unit vs, cap rates$26010.0%9.0%$210Rates8.0%Capitalization FPrice per Unit $1607.0%5.0%$1105.0%$604.0%1Q20082Q20093Q20104Q20111Q20132Q20144Q2084Q20211Q203Q20Multifarmily Price per UnitSeniors Housing Price per UnitSeniors Housing Cap RateMultifamily Cap Rate+|Seriors Housing & Care|Spring 2022 Investor Survey end Trends Outicok@ 2t22 Joras Lang LaSslleiP, ne. All rgits reserved Investors seek alternative assetsforgrowth outside of traditional sectorsTransaction volume in altemative sectors increase