Senior Living M&a Heats Up As Property Pricing Gets More ‘aggressive’ In 2026

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The expectations of buyers and sellers are moving closer together and pricing is becoming more favorable for new transactions, setting the stage for an active M&A year in 2026.

Senior living dealmakers made 21% more transactions in 2025 compared to the previous year, representing a record-breaking year for senior living real estate transactions, according to a report by Levin Associates.

Buyers of smaller portfolios or single communities drove a good amount of activity last year. Large real estate investment trusts (REITs) like Welltower (NYSE: WELL) and Ventas (NYSE: VTR) subsisted on relatively low costs to acquire compared to development.

Now, the size of deals is growing, pricing is approaching pre-Covid levels and M&A is heating up in 2026.

“Aggressive is the best way to put it,” JLL Capital Markets Managing Director Jay Wagner told Senior Housing News.

Buyers and sellers are now able to ink deals with a forward capitalization rate, such as a one-year cap rate, as opposed to a trailing six months cap rate based on operating performance, Wagner said. Cap rates have compressed “fairly dramatically” since mid-2025.

Class A assets with stabilized occupancy and operating performance under an established operator are most often trading hands this year. Buyers are still seeking assets that include full continuum communities with at least 100 units. Assisted living and memory care properties also carry stronger demand and pricing power, Wagner added.

“Prices will continue to increase and that’s a dynamic that I expect we’ll continue to see throughout 2026,” Wagner added.

‘Aggressive’ pricing and transaction activity

In 2026, many buyers of communities picked up properties at a favorable rate to replacement cost. This trend is currently holding, but there are early signs it is changing.

In 2026, senior living communities are trading for more than they were previously and “pricing is more aggressive,” said Berkadia Managing Director for Berkadia Seniors Housing and Healthcare Cody Tremper. Eager to buy properties that will benefit from the industry’s immediate demand, buyers are moving away from dynamics like price per unit and foregoing some fact-finding regarding a property’s operating performance history.

“We’ve seen a big shift in pricing over the last 12 months but it’s still fundamentally sound and very competitive,” Tremper told SHN.

If fundamentals of a property or a property’s cash flows make sense to a prospective buyer, they’re willing to stomach deals transacting at prices only close to replacement costs, something that was a potential “deal killer” just last year, Tremper said.

That’s because replacement costs are a moving target that factor in deal specifics like land costs, entitlements and general risk. While transadfzRzgctions can sell at or above replacement costs in 2026, Tremper said on the whole, transactions would continue to trade below replacement costs following similar trends seen in recent years.

Watching the flow of transactions at or above replacement costs is important, even if those types of transactions are less common today because it could indicate when a shift towards broader development activity could begin.

“People fundamentally understand that we need the units and demand is there for units but they’re balancing a return profile with their equity and it still makes sense to buy rather than build new,” Tremper said.

In the last 12 months, JLL has reported a “number of instances” where transactions for senior living properties were priced above replacement costs, “sometimes materially” so, Wagner said. But, the bulk of transactions are still below replacement costs.

“What’s interesting is that while the bulk of those above replacement cost trades have taken place in primary markets, we actually have seen a handful of trades in secondary markets where you might not expect to see it,” Wagner said.

In the last year, Vium Capital has reported “more instances” of high quality properties trading at or above replacement costs that were well located, stabilized assets, but those instances remain “the exception rather than the rule,” Vium Capital Principal and co-Managing Member Steve Kenedy told SHN.

Sellers gaining the upper-hand

Today, sellers now “have the upper-hand” in dictating terms on a transaction based on the competitive nature of the senior living M&A environment, according to Tremper. It’s not unusual for properties listed for sale to receive multiple rounds of bids from competing parties.

Pricing power also remains strong because of the types of assets that are available, typically newer or new vintage properties that offer a full continuum of services, coupled with rising occupancy rates, improved margin and care revenue, Wagner said.

Operating cost volatility and short-term interest rates also have come down in the past 12 months, Kennedy said.

“We expect pricing to continue to gradually improve throughout 2026 as stabilized net operating income becomes more evident, demand continues to strengthen and limited new supply comes online,” Kennedy said.

Monitoring capital availability will be an “important variable” for ownership and investors in the industry in 2026, Kennedy added.

Since late last year, buyer-seller dynamics around Class A properties have also changed to favor sellers, Senior Living Investment Brokerage (SLIB) Managing Director Ryan Saul told SHN. That’s due to the competition for stabilized properties which could ultimately lead to a “shortage of opportunities” as M&A is favored over development for that asset class.

Sectors to watch include independent living as younger older adults seek out senior living options along with assisted living as acuity drives demand for health care-savvy operators, Saul said.

If current trends persist, Saul expects pricing power to increase for sellers and he also anticipates “larger portfolio transactions” that could help improve average asking prices, Saul said.

In 2026, Wagner said the “differential” from a pricing standpoint between full continuum properties and standalone assisted living or memory care “has narrowed,” meaning both are becoming more attractive to investors. This could impact the competitive nature of M&A this year, Wagner said.

“Prices continue to increase and that’s a dynamic that I expect we’ll continue to see through 2026,” Wagner said.

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