The senior housing sector is experiencing a spike in demand due to increased life expectancies happening alongside declining birth rates.
Occupancy jumped 80 basis points — from 87.3% to 88.1% — in Q2 2025, marking the third consecutive quarter of gains and reflecting more than 625,000 occupied units.
Behind this surge is a phenomenon dubbed the “Grey Wave,” a global trend exacerbated by nearly 73 million Baby Boomers in the U.S. reaching retirement age.
While demand is up, new inventory is lagging far behind. Fewer than 22,000 units were under construction at the end of last year, and fewer than 10,000 were delivered in all of 2024 across major markets, according to the National Investment Center for Seniors Housing & Care.
The imbalance is putting pressure on developers and operators to bring more units online. But with high construction costs and tight credit markets, many are looking for creative ways to finance new projects or revitalize underused assets.
That’s where Commercial Property Assessed Clean Energy (C-PACE) financing can play a pivotal role.
“Due to the significant demand tailwind over the next 10 years and the limited new supply in the senior housing industry, C-PACE is becoming a more viable financing option for owners and developers in this industry,” said Brian Chandler, Senior Managing Director and National Leader for the Seniors Housing Practice at Partner Valuation Advisors.
“With lower up-front capital costs and longer-term, fixed-rate financing, senior housing projects will have a better opportunity for reduced operating costs with energy-efficient upgrades and the potential for increased asset values.”
Why C-PACE Makes Sense for Senior Living
C-PACE is a long-term, low-cost financing tool that helps fund energy and water efficiency upgrades, renewable energy systems and resilient building improvements. It can be used on new construction, renovations, retrofits or as a recapitalization tool, and it’s repaid as a special assessment on the property over terms of up to 30 years.
For senior living communities, the benefits are clear:
- Make projects pencil: C-PACE can comprise up to 35% of the capital stack, reducing the equity burden and helping close funding gaps, which is especially useful when traditional lending is constrained.
- Lower operational costs: Energy-efficient HVAC systems, lighting upgrades, water conservation, and building envelope improvements reduce monthly expenses, improving net operating income.
- Improve comfort and sustainability: Healthier indoor environments and lower utility bills enhance both resident satisfaction and long-term asset value.
Case Study: Proveer at South Shore
A prime example is Proveer at South Shore in League City, Texas. The developer used $4.6 million in C-PACE financing to help transform an aging building into a state-of-the-art assisted living and memory care community. The funds supported critical improvements to the building envelope, HVAC, lighting and plumbing systems, all contributing to long-term cost savings and improved asset value.
By using C-PACE, the project team was able to reduce upfront capital requirements and bring much-needed senior housing to the market faster.
Meeting the Moment
As occupancy rates climb and inventory remains tight, C-PACE offers a timely, strategic solution. Whether you’re renovating an outdated facility or launching ground-up construction, C-PACE can unlock capital that helps you meet demand while improving operational efficiency.
Have a senior living project in the pipeline? Reach out to Lone Star PACE to learn how C-PACE can strengthen your capital stack and bring your vision to life while supporting the growing needs of our aging population.