Senior Housing and Care Deal Volume Outpaces All Other Health Care Sectors

Senior housing and care deals accounted for the highest transaction volume of any health care sector last year.

Of the 1,094 health care transactions tracked in 2021, 403 mergers and acquisitions (36.8%) involved long-term care, according to a recent CliftonLarsonAllen report that cited Irving Levin Associates data. Independent living/active adult, assisted living and memory care, life plan communities and skilled nursing facilities are all considered part of the report’s long-term care category. 

Dealmaking slowed substantially in early 2020 due to the Covid-19 pandemic before bouncing back over the last two years.


The rebound is likely due to significant levels of available capital, mixed with the anticipated capital gains tax changes pushing sellers to consider or facilitate a transaction, the report said.

The flurry of deal activity also appears to be led by private equity investors.

The bullish nature of investment is “primarily due to the unfolding demographic shift” of an aging population in the years ahead, the report states. Population projection data shows that by 2040, about one in five Americans will be age 65 or older, up from about one in eight in 2000, U.S. Census Bureau data shows.


In 2021, 62 of the 78 transactions tracked in the report involved private equity buyers compared to a similar rate in 2020 when 65 of 70 transactions were private, the report shows. For perspective, private equity investment peaked in 2019 at $186 billion and came close in 2021, Lument Managing Director Casey Moore previously told SHN.

Courtesy ClinftonLarsonAllen, data via

Strong private equity investment in the long-term care sector coupled with pandemic relief funds have supported providers, even as short-term problems tied to lagging occupancy rates and industry-wide labor shortages persist. Even as the challenges in the near-term pose a potential investment barrier, recent private investment appears to show cap rates continue to trend downward, the CLA report noted, suggesting that investors do not perceive significant longer-term risk. 

The CLA report aligns with an industry outlook survey published by SHN and Lument in January 2022, which found that even amidst pandemic-driven uncertainty, the finance and investment outlook for senior living remains bright. That rebound is evidenced by industry investment transaction activity increasing from $9 billion in 2020 to $14 billion in 2021, according to data from NIC MAP Vision and Real Capital Analytics.

Over a third of SHN/Lument survey respondents (36%) said private equity would continue to be the biggest buyer of senior housing assets this year. Independent living could be the most attractive investment category this year, as 27% of SHN/Lument respondents said the area was the most attractive in the sector, followed by assisted living (25%) and active adult rental (23%).

Occupancy growth in the sector, while lower than pre-pandemic levels, is showing signs of improving as the last two quarters of 2021 saw increased occupancy rates for senior living operators. In Q4 of 2021, the senior housing occupancy rate was 81%, which was 6.4% lower than its pre-pandemic level of 2019, according to NIC MAP Vision data.

One provider, Des Moines, Iowa-based LCS — the nation’s second-largest senior living operator with around 135 communities — anticipated increased investment across the industry for this year. LCS COO Chris Bird previously told SHN he felt the company expects 2022 to be a “year of opportunity” as development increases and acquisitions continue in the sector.

“I do believe there’s going to be a lot more opportunities on the M&A front for the industry,” Bird said.

And private equity firms are not the only active buyers in the space. Real estate investment trust Welltower (NYSE: WELL) has invested about $6.8 billion since Oct. 2020 and recently announced the $548 million acquisition of a 33-property senior living portfolio, at about $197,000 per unit.

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