Why and how is private equity involved in assisted living community development and operations?

Assisted living (AL) cares for close to 1 million older adults who need long-term services and supports in the United States.

This qualitative study examines private equity (PE) involvement in AL mergers, acquisitions, development, and operations based on interviews with 46 senior housing professionals (including AL owners, operators, and developers, real estate brokers, lenders, PE fund managers) and state agents (licensing and regulatory oversight staff and Long-term Care Ombudsman Program leaders).

Participants indicate that PE involvement in AL responds to strong demographic demand and attractive financial returns, need for private funding sources, perceived social benefits, and absence of federal AL requirements. PE is primarily involved in AL through property ownership, but to varying degrees may also be involved in facility operations, including selecting and supporting qualified operators, and facility management.

A nuanced understanding of PE's multidimensional involvement in AL-distinct from healthcare settings-and the centrality of private capital to support the growing demand for AL is needed to guide future policymaking.