Pricing Power: How Distinctive Living, Grand Living Set Senior Living Rental Rates

Supply. Demand trends. Labor. Occupancy. Senior living operators must weigh these and other factors to set resident rental rates.

Healthy demand and senior living unit absorption have given senior living operators more resiliency in pricing in 2026, according to Eric Varin, president of sales and marketing at Grand Living.

Despite that resilience, the industry faces headwinds such as labor shortages, heavily fluctuating interest rates and affordability pressure from residents, according to Kristina Vance, senior vice president of sales at Distinctive Living. That is not to mention operational pressures caused by inflation in food, insurance, utilities and health care benefits.

Independent living offerings have greater pricing power compared to assisted living and memory care, which have tighter margins. Because of this, both Grand Living and Distinctive Living are utilizing dynamic pricing models where they can to offset other pricing pressures.

Distinctive is leaning into showing the value of senior living for prospects at a time when the average age of a resident continues to increase and care costs rise with them.

“It’s really creating that value, creating that urgency and digging into the root cause for each individual family,” Vance said. “They’re starting with home care first, so it’s getting ahead of that, selling that value and what we bring to the table that can make their life different, better and really age in place and starting earlier.”

Pricing power across the continuum

Independent living, assisted living and memory care all carry differing pricing power. Because of the needs-based nature of assisted living and memory care move-ins, operators such as Distinctive rely on clear and constant communication with family members to further demonstrate the value on offer.

According to Vance, the approach is referred to as “complaint to compliment,” and involves monthly calls with family members to inform them of what the residents have been involved with, along with noting health declines early so there can be informed discussions on increasing care. At the same time, staff are asking about concerns or complaints to get ahead of them.

“They respect that consistency and communication. It brings them in as a partner,” Vance said. “If or when something happens because it does, we’re all human … They’re more likely to be forgiving, and they build that relationship.”

Independent living prospects act with less urgency and opt to seek connection and hospitality, helping to give operators more pricing power when renting those units.

“Aspiration has far greater elasticity than necessity,” Varin said. “They’re comparing us not just to other communities, but just probably clubs to travel, to stay at home with layered services. So when the experience feels elevated and differentiated, price becomes relative rather than absolute.”

Independent living focused operators are poised to benefit from the more affluent, wellness focused and lifestyle driven baby boomers that are entering the market if they invest in catering to those wants, Varin added.

“They expect quality, and they are willing to invest in environments that reflect the life that they built,” he said. “When a product aligns with their identity, when people feel seen, heard and valued, the pricing power strengthens considerably.”

Incentive strategies

Bloomington, Minnesota-based Grand Living’s offerings revolve around luxury level independent living. As such, incentives are only used in strategic circumstances in order to maintain pricing integrity, which matters more at that level, Varin said.

In the instances they are used, it is time based to create a sense of urgency for a prospect that is emotionally ready to move, but may be stalled with selling a home. That way, according to Varin, it doesn’t devalue the product as a whole.

“If we find ourselves relying on incentives … It is usually a signal for us to re-examine our positioning, our differentiation, our value story and also the sales team’s actual skill to make sure that they are not reliant on that sort of thing to close,” he said.

Grand Living takes what Varin calls a segmentation strategy, where small discounts are offered for apartments that have a more moderate absorption rate rather than global, across-the-board discounts or pursuing value enhancements rather than discounts, such as move-in support packages.

“In a luxury setting in particular, confidence in the experience is the most powerful pricing tool that we have,” he said.

For other operators with assisted living and memory care options, maintaining profitability with incentive use becomes a balancing act. For Freehold, New Jersey-based Distinctive Living, approaching incentives is reviewed on a case by case basis, and the company recently completed a realignment in regards to its approach.

Because of this, Distinctive’s incentive strategy comes from sales teams understanding the community’s average expenses per unit, so when an incentive is offered, it doesn’t cut into profitability. Leading with incentives is not seen as an option, however. Part of the team’s sales process involves “digging deep” to find what brought the prospect to the community’s door in the first place and utilizing that experience to build incentives around.

“It is ensuring continued, constant coaching to find out all of the details of what we know about the financial situation, timeframe, savings, all that. And then if we need to do something, we’re breaking down and using only what we need,” Vance said. “We’re still helping the customer find a situation and solution, but also still managing from an operations business side too, and increasing direct revenue.”

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