Senior Living M&A Heads Toward Record 2026 Despite Rising Treasury Yields

The 10-year U.S. Treasury yield rose from 4% in February to roughly 5.1%, according to Senior Housing News. Even so, Jason Dopoulos, Co-Manager and Principal at Ikaria Capital Group, said the number of M&A transactions through October is almost equal to all of last year's record total. "The whole year has seemed kind of like a sprint," he said.

The demand case rests on a few figures the article cites. Occupancy in primary markets has climbed above 90%, and operators have more room to pass through rent increases. Fewer than 16,000 units were under construction nationally as of the second quarter of 2026, according to the National Investment Center for Seniors Housing and Care (NIC). NIC MAP data also project the 80-plus population to grow by roughly 33% through 2030.

Lenders are absorbing part of the rate shock. Ari Adlerstein, Managing Director at T7 Capital, said base rates rose 20 to 30 basis points while lenders cut their spreads by the same amount. "We're at a net even," he said. Steve Kennedy, Co-Founder and Principal at Vium Capital, took a more cautious view. He said higher rates mean higher debt costs, lower loan proceeds and more equity required, which could slow some closings as lenders look harder at leverage and debt service coverage.

The strain may not fall evenly. Ryan Saul, Managing Partner at SLIB, said rising rates could make it harder for private and regional owner-operators to compete with buyers that have a lower cost of capital. Dopoulos said the pool of deals could be held back by debt service coverage and by how much HUD financing a property can support relative to its value.

New construction looks more exposed. Rob Korslin, Co-Head of North America Transactions at Harrison Street Asset Management, said most projects rely on floating-rate construction loans, so they feel rate increases right away. With materials and labor inflation, he said, bringing new supply online may be harder in the near term. Less new supply would add to the occupancy and pricing support for existing buildings.

Sellers hold the advantage for now. Dopoulos said it is common to field more than a dozen buyer calls per transaction, more than last year. New institutional funds from Clarion, Silver Wave Capital, Artemis Real Estate Partners and AEW are chasing stabilized Class A properties. Phil Kayden, Chief Investment Officer at Health Wave Partners, said buyer and seller pricing expectations have been mostly aligned for much of the year. A first-half 2026 CBRE investor survey found cap rates declined across senior housing segments.

As primary-market assets get scarcer, buyers are looking further out. Adlerstein said investors have "almost no choice" but to get comfortable with secondary and tertiary markets. Saul said assisted living makes up a large share of SLIB's deals.

A note on the evidence: this is a set of interviews with deal participants, not audited industry totals. Several of them have a stake in the market's health. The Oct. 15 report on BDT and MSD agreeing to buy Sunrise Senior Living from PSP Investments points the same way, toward new capital interest in the sector, though this article does not mention that deal.

What to watch next

Whether the fourth quarter brings wider gaps between buyer and seller pricing, slower closings, or a lender pullback if the 10-year yield keeps climbing.