Stronger Demand Helps Senior Living Operators ‘micromanage’ Rental Rates Ahead Of 2026

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Senior living providers are taking a more targeted approach to 2026 for asking and rental rates. It’s not a reset, but an evolution.

As operators notch improvements in occupancy and resident satisfaction scores, they are gaining pricing power that aids their rate growth strategies.

Operators report that larger units with more square footage per layout are currently popular across the senior living continuum, and factors like rising acuity have led to more needs-based demand in assisted living and memory care. Recent data shows operators have more pricing power over independent living units, which is helping them target more affluent and active older adults for those settings.

Merrill Gardens Senior Living stabilized its occupancy figures approximately 18 months ago, and now the Seattle-based operator is moving toward a more nuanced and market-specific rental rate approach in 2026, according to COO Jason Childers.

“The goal is really the same,” Childers said. “It’s how we can optimize our rate growth potential, given the product we offer, the demand we are experiencing and the local market conditions we’re facing.” .

In 2026, senior living operators including Merrill Gardens, 12 Oaks Senior Living and The Aspenwood Company are facing changing rate dynamics and adjusting on the fly to adapt their selling strategies.

Strong demand allows providers to ‘micromanage’ rates

In the last five years, senior living operators have grappled with several factors necessitating resident rent increases, such as rising prices on goods and equipment for operations and keeping up with higher staff wages.

In 2024, Dallas, Texas-based 12 Oaks grew resident rates on average by 10.4%, and this year it grew resident rates by an approximate 9.5% increase. Looking ahead to 2026, occupancy is increasing, and that will allow the company to “really micromanage” increases specific to unit type with a focus on “maximizing” revenue per available room (RevPAR) in the new year, according to 12 Oaks President Greg Puklicz.

Reduced new supply and higher occupancies are giving 12 Oaks the confidence to shift from macro rate moves to a more detailed approach to rate increases by unit type, level of care and market.

Alternatively, The Aspenwood Company in recent years took a more conservative approach to rate growth, but with occupancy gains stacking up over the last three years, the company’s leaders believe it’s time to get more “assertive” on rates. The company is transitioning from historically conservative increases to a posture of “confident” rate optimization, grounded in proof of demand and capturing that demand, according to Vice President of Sales and Marketing Joshua Bentley.

“The most important thing is to not compromise standards, despite fluctuations that may have happened in the cost landscape from labor, food, supplies, compliance and capital improvements,” Bentley said. “Those costs are real, and they are rising exponentially.”

This year’s cost-of-living adjustment (COLA) for Social Security beneficiaries was 2.8%. On average, Social Security retirement benefits will climb approximately $56 per month starting in January. This increase was lower than anticipated, Puklicz said, noting that operators must take this into consideration when adjusting rates next year.

Operators have equipped sales staff with demonstrated improvements in residents’ care progression and are making the case for ending long-running concessions in favor of more targeted discounts when necessary.

“You have to be careful,” Childers said. “If you push too hard, and your occupancy starts to fall, that’s the biggest driver of rate growth potential.”

Renewals vs. street rates for 2026

12 Oaks is taking a more aggressive rate strategy for renewals than on market rates. In general, 12 Oaks communities work with residents experiencing financial pressure, Puklicz said.

For new move-ins, 12 Oaks is more price competitive and is deliberately shifting from offering recurring concessions to one-time tools like community fee waiver, Puklicz added. Merrill Gardens is raising rental rates between 4% and 7% for current residents and 3% to 8% for new residents, Childers said. He noted the company is at the tail-end of 2025 “seeing more price elasticity than ever before.”

“We know we’re going to have some of those negotiations when it comes time,” Childers added.

Bentley noted that the executive director plays the most critical role in helping staff manage these tough conversations, with Aspenwood teams instructed to “lead with empathy but also the transparency of” where rates need to go in order to cover rising costs.

“Our residents should live fuller lives with us than they did before,” Bentley said, describing this as a way to reframe rate increases in terms of quality-of-life improvements.

Merrill Gardens’ response for sales teams and executive directors is to equip staff with resources and data to show “what’s happening and why prices are going up,” and 12 Oaks and Aspenwood take similar approaches as rate pushback emerges.

“The more challenging conversation is the one we have to have with our EDs than the EDs with the residents,” Puklicz added. “Sometimes it’s a matter of training and education in terms of financial performance.”

How rate action could vary across the continuum in 2026

Satisfaction scores for senior living operators have continued to rise in recent years, and operators are adjusting to meet new demand across the continuum. In independent living settings, larger unit types are most popular heading into the new year, Puklicz said.

“We often see a correlation between unit size, unit rate and occupancy levels,” Puklicz said.

Aspenwood has reported “very strong rate capture” for independent living units, with the ability to push market rates “exponentially” between 6% and 10%, Bentley noted. Due to rising demand, having only a handful of available units allows sales teams to be confident, and that confidence can translate into a strong culture that prospects want to move into, Childers said.

In assisted living, operators see a more modest rate approach ahead due to higher price sensitivity and a heavier focus on affordability, Bentley said, with assisted living rate increases averaging 4% to 6% in 2026. The balance in finding the right rate strategy versus the affordability of assisted living will shape higher-acuity settings in the years ahead, Puklicz said. In memory care, record demand and pricing continue to climb.

“In memory care we’re seeing record high demand, but we’re seeing highs on pricing. We’re still increasing those rates on market anywhere from 5% to 7%,” Bentley said.

This demand has allowed Merrill Gardens to also increase rates in memory care, Childers added. Puklicz expects the trend of larger units, especially two-bedroom or large one-bedroom units, to continue in 2026, as they are in “great demand,” he said.

Prospects of Aspenwood’s new developments in Nashville, Tennessee and Charlotte, North Carolina, are requesting combined units, and they are “willing to pay a premium price for it,” Bentley said.

This has carried out west in Merrill Gardens’ sphere of influence, with some communities able to push two-bedroom units 15% above current market rates due to strong, sustained demand for larger spaces.

Looking ahead, Puklicz believes the senior living sales model has permanently shifted from transactional promotion to more relationship-based advisory selling.

“The days of pulling out the balloons on Saturday and offering $500 off are just over,” Puklicz said, referencing operators’ need to evolve their selling tactics to rely on market-by-market selling patterns over old marketing tactics.

In order to achieve strong pricing power, Childers said Merrill Gardens communities and the broader industry “have to earn the pricing power every day” by bringing hospitality, care and maintaining brand reputation to create a strong base of satisfied, happy residents.

“The residents, they become your ambassadors,” Childers added.

In 2026 and beyond, Childers said the days of standard 3% to 5% increases might be over, but operators must check their pricing power and resident pushback on rates before biting off an aggressive increase.

Aspenwood anticipates continued room to push rates, especially in independent and memory care, as long as the value story and operational delivery remain strong, Bentley said.

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