Healthspan, Staffing, Revenue: Inside Senior Living Industry’s Margin-Boosting Efforts 

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The senior living industry has shifted from occupancy recovery to margin growth as capacity narrows, and operators are boosting healthspan of residents, improving their workforce and more closely managing revenue.

Higher rent and occupancy growth in recent quarters have not necessarily spelled margin growth, according to a new NIC report. Labor efficiency, expense management, pricing and a keen eye for local market and property characteristics can make all the difference with regard to margins, NIC Senior Principal Omar Zahraoui told me.

Zooming in the lens, I have seen operators take strategies that I think will help them boost margins, or at least keep them at or above their targets. From re-examining operations to identify costly inefficiencies to boosting resident care and therefore quality, many operators are looking within rather than outward for their next chapters.

In this members-only SHN+ Update, I analyze recent data and trend coverage to offer the following takeaways:

• What’s behind the struggle of notching higher margins in 2026 

• Why operators need new strategies for boosting revenue  

• Margin-boosting efforts of operators including Arrow Senior Living, The Springs Living and more 

Margins hit a wall for some operators

Demand for senior living is surging, and many operators have spent the last few years raising rental rates for their residents. New NIC data shows this didn’t effectively elongate average margins for many senior living operators. Instead, rent increases helped close a revenue gap caused by growing expenses.

Strong occupancy and pricing are no doubt a tailwind, but margins are more than just a math equation of supply, demand and rent. According to NIC’s research, they are influenced by a potentially nebulous set of factors that include property type, local market fundamentals, past property performance and operational health.

Indeed, NIC data showed wide variation of margins among operators. For example, while the top quartile of independent living operators have profit margins near 50%, the bottom quartile is doing worse than they were in the two years before the Covid-19 pandemic. This isn’t just a market-to-market issue: even properties operating “within the same broadly favorable demand environment can produce very different financial outcomes,” Zahraoui told SHN.

“Senior housing is, after all, both real estate and an operating business. And as occupancy rises, that distinction becomes more important, not less,” he wrote in a recent analysis. “Strong occupancy tells us how tight the market has become, but what it means for operating performance depends on what happens at the property level, especially where incremental occupancy can be absorbed without a proportional increase in operating costs.”

Simply put, it’s what happens inside senior living communities, not the forces outside of them, that have the most effect on margins in 2026. As Zahraoui noted, there is not one single strategy that operators are taking to improve margins. To that end, I see operators employing a variety of strategies at their properties to improve their margins at the end of the day.

Healthspan, staffing, other margin-boosting efforts

Operations geared toward care quality and a longer length of stay. More staffing efficiency and a pipeline of potential workers. Budgeting for lower expenses and reducing revenue mistakes. These are some of the strategies that senior living operators are taking to boost their revenue and margins.

Among Arrow Senior Living’s operational “secret weapons” is a partnership with Arizona State University, more specifically students of Professor Jeffrey Baum’s data science program. The company has used that effort to sift through company data and help build business intelligence platforms.

Specifically, Arrow’s leaders have used those efforts to re-examine medication distribution for residents and identify prospects that are more likely to engage with the company’s sales teams.

“There’s so much you can do for operational efficiencies, for business model innovation, creating new revenue streams and for getting better wellness outcomes for the residents, which is a nice social good but it also translates into business value, too, because the better wellness outcomes, the longer length of stay and less vacancies,” Baum told SHN.

Arrow isn’t the only senior living operator seeking to improve revenue via efficiency. Discovery Senior Living, for instance, focuses on adjusting pricing alongside occupancy changes, according to Esmerelda Lee, senior vice president of operations, noting the same strategy that works for 82% occupancy isn’t necessarily appropriate at 97%. It also focuses its efforts on billing and assessment processes to capture revenue that could be missed as a resident’s care needs evolve.

LCS, on the other hand, avoids seeing sales and operations as two separate entities and tries to get them to work together to make stronger businesses decisions, such as a low-rate move-in looking like a sales win but may be the wrong revenue decision when availability is constrained, according to President and CEO Chris Bird.

“It’s really a combination of supply, pricing, conversion, retention and occupancy. The strongest operators manage all of those levers together to maximize the value of every unit and every resident relationship,” Bird told me.

Oher senior living operators are seeking to boost the healthspan of their residents by expanding access to care services. This week, The Springs Living announced a new partnership with SCAN to launch a health plan initially slated to serve older adults living in more than 1,900 The Springs Living residences in the Portland, Oregon area. SCAN oversees one of the largest nonprofit Medicare Advantage plans through its Institutional Special Needs Plan (I-SNP)

“The goal here for us is to improve the quality, the healthspan and lifespan of older adults today,” The Springs Living CEO Fee Stubblefield told my colleague Austin Montgomery. “This is not a real estate business going down the road hiding under the veil of senior housing operations; this is truly a healthcare service, and that’s what we’re doing.”

By expanding care access, leaders with The Springs Living believe that residents will stay longer and enjoy a better quality of life thanks to preventative services. Stubblefield went so far as to say that operators which focus on real estate and hospitality in lieu of healthcare are potentially running off a “cliff.”

At the end of the day, all of these strategies are meant to help senior living operators compete in a world full of new challenges and disruptions. I agree with Stubblefield that residents will prefer communities with more holistic care offerings, and I think that will put pressure on other operators that don’t dabble in those practices.

I also think that Arrow Senior Living, Discovery Senior Living and LCS, have the right mindset in looking inward to grow margins. Operators consistently tell us that margins at or above 40% are possible in independent living, and the NIC data shows that is true. But the era of simply adding more residents or raising rates to grow margins is over, at least for now, and operators must act accordingly.