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The senior living industry is awash in a “perfect storm” of low new supply, high demand, strong rent growth and continued occupancy gains. Those conditions could unlock billions of dollars of capital on the sidelines for new transactions this year.
While macroeconomic turbulence in the form of stubborn interest rates and tariff-fueled uncertainty continues to cause broader market volatility, investor optimism is growing as capital providers shift their strategies for the new reality.
After years of “thawing,” or “kicking the can down the road,” I see signs that the senior living transaction environment at the midpoint of 2025 is nearing a return to full strength in terms of transaction volumes compared to pandemic-driven lows in dealmaking in 2021 to 2023.
As Berkadia Seniors Housing and Healthcare Managing Director Cody Tremper told me, this “perfect storm” makes the senior living investment space an area new investors could realize “outsized returns, albeit with some more risk.”
“It’s a nice spot for investors to start to put some money into,” Tremper said of senior living investment in 2025.
According to NIC Senior Principal Omar Zahraoui, the current operational landscape is mixed with both short-term opportunity and long-term uncertainty.
On one hand, the senior living industry occupancy recently outpaced other major commercial real estate classes for the first time in years and low new supply has fueled transactions as assets are trading below replacement costs. But on the other hand, factors like hiring challenges, a lack of new immigration and the growing threat of mass deportations, along with the on-again-off-again nature of tariffs enacted under U.S. President Donald Trump continue to imperil and cause uncertainty for the still-recovering senior living industry.
As Zahraoui notes, these friction points could pose future headwinds for operators and their ownership partners to navigate in the years ahead. But, in the short-term, mergers and acquisitions activity will continue to rule the day until development ticks up. If transactions continue at a strong pace, development could soon follow.
“Transaction volume is a really good, early sign for new development because when transaction volume picks up, at a certain point, usually, people start developing,” Zahraoui told me.
In this week’s exclusive, members-only SHN+ Update, I analyze current transaction activity in 2025 and offer the following takeaways:
– What recent deal activity shows about the sector’s return to M&A
– Detailing which macroeconomic factors investors and analysts are closely monitoring
Transactions evolve in 2025 as investment pace quickens
In 2024, the senior living industry set a record for publicly announced transaction volume with 703 publicly disclosed transactions, a 26% jump from a previous record set in 2022, according to data compiled by Irving Levin Associates.
In February JLL Capital Markets reported a 24% increase in positive investment sentiment for senior living compared to 2024. A total of 78% of investors said they planned to increase their senior living portfolios this year, fueled by demographic trends, improved occupancy and low new development.
The ledger backs up this wave of positive investor sentiment JLL Senior Managing Director and Senior Housing Group Leader Jay Wagner told me. Relative to the same time in 2024, JLL senior living brokers closed sales volume has “more than doubled” in 2025, and the company’s dealbook indicates that JLL “should outpace deal volume” reported last year. On the financing side JLL reported a 250% increase in year-over-year growth, JLL data shows.
“We expect that transaction volume and investor appetite will continue to accelerate and mature as we move into 2026,” Wagner added.
A Cushman and Wakefield report released this week adds more evidence to the notion that investors are becoming more optimistic about the year ahead.
“Increased transaction activity is expected during the second half of 2025. Debt is becoming more available as lenders more programmatically open their balance sheets and debt becomes less expensive, albeit still selective,” the Cushman and Wakefield authors wrote. “These improvements in the debt markets may also help move the mountain of dry powder, $382 billion globally, off the sidelines, signaling the cusp of the next growth cycle as the strong performance of the senior living sector continues to capture the attention of investors.”
Real estate investment trusts Welltower (NYSE: WELL) and Ventas (NYSE: VTR) have both bolstered their investment pipelines in 2025. Toledo, Ohio-based Welltower has in 2025 announced $6.2 billion in investments, representing its highest level of investment in the company’s history. Leaders with Chicago-based Ventas also set a new “floor” for investment this year with a current $1.5 billion pipeline.
In February, JLL Value and Risk Advisory Executive Managing Director and Head of Healthcare and Alternative Real Estate Bryan Lockard told me he expected a “big year” from senior living transactions. This assumption appears to be playing out across the sector as transactions continue. That’s backed by the price per unit climbing 46% in early 2025 compared to last year.
It’s also important to note the nature of senior living transactions are changing from distressed assets to higher-quality investment opportunities with a return to core and core-plus investment strategies this year. A total of 43% of the Cushman & Wakefield survey respondents said they are reverting to core-plus deals and 31% toward core acquisitions, while just 13% seek distressed or value-add acquisition opportunities.
Last year was “peppered with a lot of smaller transactions,” and as 2025 has progressed, transactions have morphed to include “higher quality, newer vintage and stabilized assets” on the selling block, Tremper said.
“One difference in this year that we’re seeing is the opportunity to get to sell and for investors to acquire portfolios, which we haven’t seen on a large scale,” Tremper told me. “Over the past few years, there’s been a lot of ones and twos and three-property transactions and we’re starting to see a lot more portfolio deals.”
Through the first half of the year, Scottsdale, Arizona-based Berkadia is on pace to close, or under contract to close, as many senior living deals as the firm closed in all of 2024, Tremper told me. This shows the steady pace of transactions is only starting to return to pre-2020 form.
This shift from distress to core, core-plus and stabilized assets is also occurring at other firms. Vium Capital Managing Director Josh Vander Plaats told me that the Columbus, Ohio-based firm has seen a “clear uptick” in senior living transactions compared to the last three years.
“Many of the deals in our pipeline are stabilized assets with strong in-place coverage, which helps mitigate near-term operational pressures,” Vander Plaats told me.
He noted the company has closed over $350 million in transactions and has an additional $400 million set aside for commitments, according to Vium data.
That said, there are still many distressed and underperforming properties changing hands, including ones now managed by Sonida Senior Living (NYSE: SNDA), which has a small turnaround portfolio. But I believe this shift from distressed to value-add assets indicates a broader return of investor confidence and bullishness after years of sorting through financial strain and investors sitting on the sidelines.
But for all the talk of a transaction volume turnaround, these conditions aren’t widespread across all markets and property types, and I think this could bifurcate the market into two buckets: more pricey, stabilized Class A assets and more risky turnaround distress acquisitions. There are emerging pricing gaps between “good assets” and “bad assets,” Macquarie Capital Equities Senior Healthcare Equity Research Analyst Tao Qiu told me. From his vantage point, Qiu sees upward pressure on senior housing transaction prices compared to replacement costs.
Recently, I covered some of the struggles that aging properties face, and I think this represents some of the disjointed recovery I mentioned above.
“We expect transaction volume to remain healthy despite macro uncertainties as industry fundamentals continue to improve,”Qiu told me. “We see the pricing gap between good assets and bad assets widen, reflecting diverging economics.”
While it’s important not to discount this disjointed recovery in senior living M&A activity, I believe improved occupancy and net operating income figures will outweigh potential operational risks, continuing to fuel investment activity and sector interest for the remainder of 2025. Backing this up, Cushman & Wakefield data shows increased stabilized occupancy at over 89% this year, while at the same time operators work on growing margins and strengthening operations.
Weathering ‘turbulent times’ as industry learns from past missteps
While the senior living industry has endured more than five years of “turbulent times,” the transaction market remains “complicated,” as lenders scrutinize transactions and operator performance to “stress test” how they are able to “weather these curveballs,” according to Lument Head of M&A Laca Wong-Hammond.
“The seniors housing and care sector has many tailwinds that buoy investment demand for the long term, and those focused on the long game will overcome near term friction points,” Wong-Hammond told me.
While the disjointed nature of senior living transactions may be the “new normal,” as operators face macroeconomic headwinds due to tariff uncertainty, unfavorable interest rates and labor challenges, I believe operators and their ownership groups have learned valuable lessons from the past five years.
To mitigate the impact of tariffs, senior living operators are using general purchasing organizations (GPOs) to keep prices as low as possible and reduce supply chain hiccups,Qiu told me, noting that labor cost inflation could be absorbed by the industry’s strong pricing power on rates.
While there’s been some movement on interest rates in the last year, Tremper said he and others involved in senior living transactions will continue to monitor the Federal Reserve’s actions “like a hawk,” to watch for any potential impact on overall pricing and cap rates. On top of that, Vander Plaats said monitoring long-term U.S. Treasury yields was an important factor in shaping future, permanent financing options.
At the same time, certain operating pressures could stymie senior living provider performance in the long-term, Zahraoui told me. Difficulties hiring enough workers and increased competition for staff could pose significant challenges for operators amid a long-term realignment in staffing. This is due to the industry facing an aging population, increased demand and workforce growth concentrated in licensed care roles that operators already struggle to fill.
While the senior living transaction environment has undeniably become more complex, it also shows clear signs of resilience and maturation from just five years ago.
This increased scrutiny on operating fundamentals is not a deterrent, but rather, I believe it will be a catalyst for smarter, long-term investment. The senior living industry is not only surviving these turbulent times, it is evolving to aviate cloudier, more uncertain skies.
