Senior Living Nonprofits Still Seeing ‘Record-Level’ M&A, High Number of Closures

The senior living industry’s non-profit sector is continuing to see high numbers of operators exploring affiliations and sales, or outright closing their communities.

That’s according to a new mid-year M&A report from Chicago-based specialty investment bank Ziegler.

According to the report, 846 senior living nonprofit communities have consolidated operations in some way since 2015. That total has steadily climbed throughout the pandemic. Last year was the most active year on record for community transitions in the non-profit senior living sector, with about 110 communities having changed hands that year across 70 deals.


As for why operators are exploring affiliations and acquisitions in 2023, reasons include workforce woes, the skilled nursing marketplace, turnover among top leadership and occasionally significant expense pressures.

“We continue to see record-level activity and organizations exploring the benefits of a potential affiliation with another not-for-profit, as well as scenarios where a disposition/sale may be the most logical alternative,” wrote Lisa McCracken, Ziegler’s director of senior living research and development and author of the report. “These discussions take the form of both proactive organizations looking to gain scale and resources from a position of strength, and unfortunately, organizations in situations that may be in some form of financial distress with limited options.”

Between 2015 and the second quarter of this year, 16.9% of all community transitions have been closures. But when counting just 2020 through the second quarter of 2023, that share jumped to 27.3% — a clear sign that the sector is continuing to see disproportionate pressure.


“As we sit here in 2023, pandemic-related funds from the government are no longer available and that, coupled with workforce and expense pressures, some providers, often freestanding nursing homes, have made the decision to cease operations,” McCracken wrote.

Organizations looking to expand often have specific positions tasked with growth, business development and mergers and acquisitions.

“This is one of the more common growth strategies among today’s not-for-profit providers, along with continued reinvestment and expansions of existing communities,” McCracken wrote. “We will continue to see these proactive not-for-profit organizations scan the market for potential partners in search of like-minded providers whereby an affiliation can be a win-win for both.”

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