Non-profit senior living providers continue to face workforce challenges, leadership turnover, and expense pressures, leading to “record-level” activity in affiliations and asset sales. According to Ziegler’s 2024 Mid-Year Not-For-Profit Senior Living M&A Update, the level of M&A and affiliations in the sector has remained high throughout the Covid-19 pandemic.
By the second quarter of this year, Ziegler reported 677 nonprofit senior living consolidation transactions, up from 637 last year and 575 in 2022. Organizations are actively seeking potential partners to create win-win affiliations, with about a quarter of communities involved in transactions transitioning to other nonprofit providers.
However, Ziegler noted an increase in closures of nonprofit senior living businesses post-2020, with a 24.4% annual closure rate compared to 16.5% prior to the pandemic. Despite these challenges, the industry has seen nonprofit providers joining forces to enhance their scale and success.
While some areas of the sector, such as life plan communities and operators with skilled nursing facility exposure, face pressures, nonprofit life plan communities continue to have a “deteriorating” outlook. Collaboration and strategic affiliations are becoming increasingly important for the future success of non-profit senior living providers.
