Senior Housing Development Hopes Fizzle For 2025, Providers Focus On Customers

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Demand is rising. Occupancy and margins are improving. Operations are evolving. And yet, stalled development is casting a shadow on the senior living sector.

More than 3,100 operators, owners, investors and other stakeholders recently gathered in Austin, Texas, for this year’s NIC Fall Conference. Last year, the industry was gripped with jittery optimism about the road ahead as organizations prepped plans to grow. At this year’s conference, it was clear that some of those jitters have faded with high demand and rising occupancy levels.

However, executives told me last year at NIC they had hoped and believed 2025 would be the year “the shovels come out.” But NIC MAP data so far shows construction levels at record lows, all but dashing those hopes as development remains frozen. In the second quarter of 2025, senior living companies opened a mere 809 new units, representing the first time inventory growth fell below 1% annually, and the lowest level of construction since NIC began reporting the data in 2005.

Although senior living operators are optimistic about rising demand, there is a real and unanswered question regarding whether the industry will be able to sufficiently expand in time to meet the boomers.

Factors from construction costs and lack of equity for new projects to the availability of new workers in light of stricter immigration enforcement across the country are largely out of operators’ hands for now.

At the same time, the senior living industry is reflecting on its past in order to inform its future, and make progress in areas where operators do have more control at the moment. Gaining a greater understanding of senior living customers, and adapting to serve them, is one theme that emerged at NIC.

In this members-only SHN+ Update, I analyze the recent NIC Fall Conference and multiple recent interviews to offer the following takeaways:

• How operators can learn from the past as they approach their next growth chapter
• Why senior living companies are changing their messaging for a different new customer
• What senior living companies are doing now to prepare for the future while development remains slow

Learning from the past to build something new

One of the most interesting panels I attended at NIC this year centered on senior living industry veterans and longtime executives sharing “lessons learned” with an eye toward the future. During the panel, the executives shared six main lessons for the industry’s next chapter:

• Focus on your customer
• Plan with an ultimate goal in mind
• Find capital partners that understand your business model
• Be conservative in your capital structure
• Maintain focus on what matters
• Invest in people first

Throughout the conference, there was particular evidence of operators paying particular heed to that first lesson: focus on your customer.

The customer focus came through in a session featuring Dr. Joe Coughlin, director of MIT AgeLab, and Lee Newman, CEO of ad agency GSD&M; they discussed the need for senior living operators to change their messaging for the future.

Senior living operators should address the “elephant in the room” that older adults don’t always want to buy senior living services, advised Newman. To point out how other sectors have overcome similar challenges, he described how GSD&M and client Dodge advertised an electric version of the Challenger muscle car in 2024 to overcome customer resistance.

Coughlin believes that the current generational shift in the senior living customer base, in addition to changes like technological innovation, make this the right moment for senior living providers to develop more effective messaging as well as a more appealing product.

“Senior housing today is having a moment. You are in transition,” Coughlin said. “You now have an incredible driving demographic force, if you harness and understand the underlying numbers and … anticipate what they may want to excite and delight them with something they never really needed or wanted.”

While growth via new development is still out of reach for many companies, they do seem to be moving forward with these lessons in mind. At NIC, several operators spoke about how they are refreshing their services and expanding beyond typical models of senior living, aiming to serve a new generation of older adults.

For example, Innovation Senior Living CEO Pilar Carvajal has developed a new middle-market solution for the incoming generation called Longevity Day Club that combines adult day services like engagement and activities with services that help people age at home for longer.

“Creating these day programs where people can come in and get socialization and programming specific to them that allow them to expand their health span, allow them to be home longer, I see it is a good thing, but also as a way to solve the societal supply crunch that we have,” Carvajal told SHN reporter Andrew Christman at NIC.

Wichita, Kansas-based Legend Senior Living in recent years has shifted from development to growing via third-party management, with 73 communities today. While the company is spinning up its next act with regard to development, Legend Co-CEO and President Matt Buchanan said the company is in the meantime focusing on honing its services for a new generation of older adults.

“Where the rubber meets the road is how [care and] customer service is delivered in a quality way,” Buchanan told me. “And I think that those are the things that operators we are going to have to pay closer attention to as we move to this next generation of customer.”

Preparing for growth

Another key lesson in evidence at the conference was “invest in people first.” Several providers spoke about recent hires they’ve made, both to drive models that will appeal to a new customer base and to prepare for growth when conditions allow.

Legend has bolstered its workforce with new leaders, including hiring a director of dining services and adding to its development team Senior living nonprofit Transforming Age has hired former Erickson Senior Living COO Mark Erickson as senior vice president of market-rate communities to enhance resident experiences, staff performance and operational standards.

Transforming Age is preparing for more growth in active adult to “fill a gap” in the market, according to Frankie Pane, president of the for-profit company GSI, which provides management, development, acquisition and affiliation services under senior living nonprofit Transforming Age. For now, development and growth remain tough, but the organization is preparing for the day when that changes, with a belief that this time may come soon.

To GSI and Transforming Age Chief Investment Officer Katie Pelczar, the problem is “simply addition and subtraction.” But she also believes that “something is going to give” as demand continues to provide significant upside ahead.

“We don’t have anything in the pipeline to break ground on on the for profit side tomorrow, but we do think that it’s coming,” she said. “And we want to be ready.”

Bottom-line, I do see a lot of work underway to “be ready,” and think the senior living industry is evolving for the future. The most successful companies to come out of this period may well be the ones that not only are focused on the customer and making the right hires, but coming up with very specific goals and remaining agile enough to pivot.

“Too many times over the last 20 years, I’ve watched companies come into play, they really didn’t have a plan. They didn’t know exactly what kind of communities they wanted to own. They didn’t know what size, they didn’t know what product mix, they didn’t know what geographies,” said John Rijos, founder of Chicago Pacific Founders and CPF Living. “You have a 10 year-plan, okay, every two years, take inventory. Where are you? … It’s not linear, but you need to constantly be looking at it.”