Senior living operators are in 2025 hungry for new investments, but some traditional lending and capital sources have run dry, at least for now. A new crop of investors is stepping up to fill the gap.
Take Chicago-based Citrine Investment Group for example. After closing on its first senior living transaction in 2023, the company is deepening its holdings with a plan to invest about $150 million in new assets under management.
Citrine’s investment thesis rests on bridging the gap between capital partners and senior living operators. The company is focused on buying turnaround or value-add communities and managing them in general partnerships with third-party senior living operators.
Citrine Founder and President Lynn Jerath has worked in senior living for 25 years, and now sees the sector as standing “head and shoulders” above other real estate asset classes thanks to high demand and a low rate of new construction.
“You have so many operators, so many owners. You also have so many varieties of property types with different unit mixes and different services,” Jerath told Senior Housing News. “From a strategic industry standpoint, this allows entrants coming in who are bringing best practices … into the senior housing space and innovate, increase and efficiency, and then consolidate… similar to what you’ve seen in the hotel industry and self storage over the last 20 years.”
Meanwhile, operators are putting their best foot forward to meet and work with new capital partners, many of which are inexperienced, according to Dennis Murphy, chief investment officer of Fort Wayne, Indiana-based Priority Life Care. Priority Life Care launched a $10 million growth fund in 2024 to fuel co-investment in senior living acquisitions and was meant to build upon the structure of the company’s foundation while new development remains constrained.
“They’re less biased by prior experiences in specific markets and tend to be more open-minded and entrepreneurial,” Murphy said. “Many also have valuable experience in scaling businesses in other industries, which can translate well to a growing operational platform like ours.”
Attracting new capital partners
When Priority Life Care launched its fund in 2024, the company sought to take a small bite of what its leaders saw as a big investment apple.
The company started small with a $10 million fund meant to attract co-investors. Doing so created “more cohesiveness in our contracts” and “traction” that helped the operator share in some of the value it creates for its respective senior living ownership groups.
Today, the senior living operator still is utilizing its network of operators, developers and lenders to build new relationships, according to Murphy.
The senior living operator is seeing “meaningful interest” from family office groups, investors that are typically cautious given the complexities of the industry. While Priority Life Care sees a growing number of non-traditional capital sources-particularly family offices, private investment firms and generalist funds entering senior housing, many lack the scale or infrastructure of established REITs or private-equity firms, according to Murphy.
As such, they can’t offer access to larger pipelines or portfolio acquisition opportunities, asset-management expertise specific to senior housing, purchasing leverage with vendors or insurers or risk-pooling benefits, such as insurance or employee benefits programs, yet.
Baltimore-based Brightview Senior Living has sought private fundraising. In 2024, the company spun up a $200 million fund to finance the construction of eight communities through 2026. The funds have allowed the operator to continue its growth plan of building four new communities per year.
Sonida Senior Living (NYSE: SNDA) and CEO Brandon Ribar have sought to bring new investors and partners into the fold this year while demand for such investments is growing.
“I’ve heard on a couple of occasions at various conferences that really, other than data centers, senior living is probably the sector that people are most bullish on or just most interested in across real estate right now,” Ribar told Senior Housing News.
Sonida’s strategy for attracting new capital begins with finding groups that know current investors. Given its size as a public company, Ribar said its investors are particularly interested in growing the business’s profile.
“We get references all the time for individuals that want to learn more about our business,” he said. “We have almost daily new investor discussions with people that want to learn about our story.”
That story involves educating potential investors about senior living as a whole and Sonida’s specific owner-operator model compared to the more popular real estate investment trust model. The operator also sends representatives to banking conferences regularly, meeting an average of 15 to 20 new investment groups interested in the industry.
What tends to work the best for Sonida is a combination of word of mouth and “pounding the pavement.”
New interest rising
Capital provider interest in senior living has risen over the past six months, according to Jerath. Return profiles on other asset types that once were lucrative are today “not looking as exciting as they have in the past.”
Investment groups that have more traditionally sought office buildings or malls are building up their corporate infrastructure to take on more senior living communities in the future, according to Rick Swartz, senior managing director and co-leader of senior housing for JLL Capital Markets.
JLL’s strategy for connecting operators and capital partners focuses on education and making connections. The latest amount of interest in senior housing isn’t a new phenomenon, Swartz said, with new relationships forming from private owners always looking to utilize broader sources of capital.
“It’s forming because there is attractiveness in the space,” he said.
If operators are looking to attract more capital partners, especially those new to the industry, being clear and concise on their focuses and values can help, according to Jerath.
“A lot of times the message can get lost when you’re trying to tell a lot of things when using discernment to focus on the things that the investor is going to care about,” she said.
Looking ahead, Jerath and Swartz believe there will be an increase in partnerships and transaction volume. JLL is seeing partnerships between operators and capital partners forming with the goal to execute on deals within the coming year.
And according to Jerath, there is a potential for more portfolio deals in the coming years.
“The other thing you might see is more portfolio deals where, you know, perhaps an operator with a capital partner has built up a substantial portfolio of 10 to 30 assets, and another operator with capital coming in to buy the entire thing,” Jerath said.
