Senior Living Nonprofits Adding New Units As Financial Concerns Weigh On Growth

Nonprofit senior living providers say they will intend to keep growing in 2025, mostly by adding new units, while financial concerns continue to cause them worry.

That’s according to the 2025 Ziegler CFO Hotline survey on Growth Projections. For the survey, released this week, researchers analyzed answers from nearly 200 nonprofit senior living CFOs and financial professionals. Fifty-nine percent of respondents were from single site organizations and 41% from multi-site organizations.

Thirty-seven percent of respondents said they plan to grow their organizations in the next two years by way of unit expansion, with the second highest reported was by affiliation with a larger provider (16%). Another 14% seek to grow by new acquisitions, according to the report. And 13% of senior living nonprofit leaders said they plan to grow through new development, while 9% reported growth with satellite campuses.

The top barriers for new growth included 23% citing financial cost of growth, along with 20% citing construction pressures and 11% reported limited resources to devote to new growth, combined with workforce shortages.

In the 2023 survey, workforce concerns topped the list of biggest barriers to growth, with financial costs leading the way this year. Some additional barriers include land and zoning issues, market constraints and physical plant limitations, the report states.

“While there is strong market demand, financial concerns — including high construction costs and interest rates — have replaced workforce shortages as the biggest barrier to growth,” Ziegler Senior Research Analyst Megan Cunningham told SHN. “As a result, many operators are pursuing incremental growth, such as expanding units on existing campuses or through affiliations and acquisition, prioritizing internal scalability and technology investments, rather than developing entirely new communities.”

Common themes identified in new growth efforts mentioned include service line expansions and service diversification, along with alternate growth models and programs, along with renovations and repositionings, the report found.

Over the next two years, 43% of single-site nonprofits said they would grow by unit expansion and 32.2% of multi-site organizations said the same. Regarding affiliation, 19.7% of single-site respondents said they were considering this option compared to 12.2% of multi-site responses.

“Construction costs are insane of course. Where will the additional workforce across the nation come from,” one respondent said in the comment portion of the survey.

As a result of current pressures, “operators are adopting more cautious growth strategies, prioritizing internal scalability and technology investments on existing campuses rather than launching new, large-scale developments,” Cunningham said.

“The trend of reducing skilled nursing beds, which was noted in 2023, has also continued as a consistent practice within the sector,” she added.

Even with barriers ahead, 63% of respondents in the survey said they would move forward with projects despite headwinds while a remainder of organizations scale back projects or put them on ice. As one operator wrote, it’s “full steam ahead” for those looking to capitalize on incoming senior living demand.

Looking ahead, Ziegler Managing Director Sarkis Garabedian said the organization views 2026 as a “breakout year for senior living,” and one that will “exceed what” the 2025 study projects due to demographic trends, consumer demand and renewed capital confidence to push nonprofit senior living providers “further and faster” than in the past.

But at same time, the for-profit sector remains constrained by capital, a dynamic providers know will not last indefinitely.

“That urgency is fueling action now, as organizations race toward 2030 to close the senior housing gap,” Garabedian said. “This report provides a useful snapshot of current momentum, but we view it as a baseline – our expectation is for a steeper trajectory as the sector leans into the powerful intersection of demographics, innovation, and investment.”

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