Following a record-setting year for seniors housing and care mergers & acquisition (M&A) activity in 2025, what do industry leaders foresee regarding continued deal activity, preferred asset class, and the state of valuations?
To explore the answers, we view the results of the 2026 Senior Living Outlook Report, a collaboration between Lument and Senior Housing News, through the eyes of Lument’s Head of M&A Laca Wong-Hammond, who helped put survey results in context.
According to qualified respondents to the 2026 survey, 45% indicated they plan to buy seniors housing assets in the next year and 14% indicate they plan to sell, with assisted living (AL) and independent living (IL) as the most attractive categories. Do those figures align with your expectations for 2026 based on conversations with clients?
Laca Wong-Hammond:
Yes, we are experiencing much stronger seller sentiment as owner-operators are ready to capitalize on their strong operational performance and the favorable capital markets outlook and become more committed to an exit. Our transaction pipeline is nearly all stabilized, cap rate-worthy exits. Categorically, there is a slight tilt in favor of private pay seniors housing operators exiting, but we are advising many skilled nursing operators on exits as well. Lastly, capital partners (limited partners, private equity funds, etc.) are looking to recalibrate their investments and hence recapitalize. We expect 2026 to be a very active year for M&A.
When asked how respondents foresee senior living asset valuations changing in 2026, 60% predict valuations will rise (an increase from 53% last year), 34% predict they will remain stable, and only 6% predict they will fall. The number of respondents predicting a rise in valuations has steadily risen in the past few years—do you agree with that optimistic outlook?
Wong-Hammond:
Valuations will rise due to several factors: The first is higher levels of profitability and revenue across all acuities in seniors housing and care. Secondarily, it is the buoying of value by lower cost debt. I believe new dollars per bed records will be reached with the visible pipeline we are currently advising, as investors have long been waiting for “blue chip” type portfolios after becoming fatigued with deep turn-arounds.
When asked who the biggest buyer of seniors housing assets will be in 2026, 41% of respondents selected private equity and 20% selected public real estate investment trusts (REITs). Does that align with your expectations?
Buyer type depends on the investment profile of the opportunity, which is chiefly why Lument’s M&A team hand-selects every buyer list, never blast emailing. I think by volume or number of deals, private equity will outspend REITs, but the REITs will win bids on large portfolio transactions simply because they have broader access to capital and lower overall cost of capital. Some REITs’ dividend rates are sub-2%, so even a bid at 5% cap rate will be immediately accretive.
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