What The Recent Bridge, Artemis Acquisition Plans Mean For Senior Living M&a In 2025

This story is part of your SHN+ subscription

Two major real estate acquisitions announced in the last two weeks are setting a faster pace for senior living investments to come in 2025.

Earlier this week, Apollo (NYSE: APO) agreed to acquire Bridge Investment Group, a capital markets company that owns 62 senior living communities as part of a much larger real estate portfolio, in an all-stock transaction valued at approximately $1.5 billion. A week earlier, private global asset manager Barings announced it is acquiring Artemis Real Estate Partners, a longtime senior housing investor with $11 billion in real estate assets under management in 2024.

These acquisitions, coupled with other recent investments and plans from real estate investment trusts (REITs), indicate to me that the senior living transaction market – and competition for deals – is picking up in 2025.

In the coming year, I think this could lead to new opportunities for operators to partner with institutional capital in a variety of ways ranging from teaming up with private equity and joint venture arrangements to launching family office investment vehicles.

At the same time, the senior living industry has a great need for new investments, which I believe will spur much more activity down the road. An institutional investor could make a $1 billion play tomorrow – “And you’re not even scratching the surface of the need for senior housing investment over the next five years,” Lument Managing Director Justin Elshire told me.

In this members-only SHN+ Update, I analyze the recent Apollo and Barings transactions and offer the following takeaways:

• What recent transactions mean for the pace of senior living dealmaking in 2025

• How institutional investors could increase competition in senior living acquisitions 

• Why investor sentiment is driving a positive investment outlook

2025 deal pace ‘off to a fast start’

The past couple of weeks have brought announcements of two splashy deals with significant exposure to the senior living industry. At the same time, REITs are gearing up to grow their RIDEA-centered senior housing operating portfolios in the year ahead. Both trends indicate to me that the senior living transaction market is still heating up in early 2025 as capital comes off the sidelines.

With its acquisition plan, Apollo, one of the largest hedge fund and private credit delivery firms globally, is set to become a top-25 owner of senior living properties, according to the American Seniors Housing Association (ASHA) 2024 list. Charlotte, North Carolina-based investment company Barings plans to acquire Artemis, which in 2021 launched a health care fund of $1 billion that included value-add acquisitions in senior housing and medical offices.

This comes as REITs including Welltower (NYSE: WELL) and Ventas (NYSE: VTR) have increased their investment pace in senior living in 2025.

In the last 45 days, Welltower closed or was under contract to close on an investment pipeline of $2 billion across 27 transactions, mostly in senior living. Welltower also a month earlier launched a private funds management business, which is acquiring NorthStar Healthcare Income and its 40 senior living communities for $900 million.

Meanwhile, Ventas closed 2024 with more than $2 billion of investments made primarily in senior housing, with a further “line of sight” on a pipeline of $1 billion in future acquisitions. Add to that the fact that both National Health Investors (NYSE: NHI) and LTC Properties (NYSE: LTC) have continually sought to upsize their burgeoning SHOP segments with new lease conversions and other transactions.

Those involved with getting senior living acquisitions penciled out have had to wait on the sidelines, but that’s starting to change, as the senior care industry saw a record number of publicly announced transactions, according to LevinPro LTC data.

“The commonality this year is that every area of the country is picking up in terms of deal volume, as well as interest,” Elshire told me. “These groups that have been patient are now definitely trying to be aggressive in the market.”

With stable interest rates and asset values emerging early in 2025, capital markets are “slowly and selectively” returning to get deals done, according to a NIC blog post by Molly Odgers, who is the vice president and relationship manager at BOK Financial.

“Regardless of what is to come in 2025, the ability to rely on patient and flexible partnerships between sponsors and capital providers continues to be a vital resource, Odgers wrote.

This aggressiveness follows last year in which the U.S. Federal Reserve enacted the first rate cuts since 2020 and distressed assets along with core-plus acquisitions drove senior living transactions in 2024.

In 2024, new senior living construction fell to levels not seen since 2009. Over the last 18 to 24 months, senior living M&A has been slower due to stubborn interest rates, cap rates and a disconnect between buyers and sellers.

But institutional investors haven’t been “fully sidelined” since 2023, as Senior Living Investment Brokerage (SLIB) Executive Vice President Dave Balow told me. But acquisition criteria for institutional investors became more strict at the same time.

“A lot of these investors had a lot of equity that had been pent up, and now they are looking to deploy it now that the capital markets are less volatile,” Balow told me.

As I look ahead to the remainder of 2025, I see multiple indications that more transactions are on the horizon, including the fact that investment in commercial real estate generally could be on the upswing.

Some of the same trends that are defining the senior housing market are at play in real estate across other asset types in global markets. For instance, “supply is constrained, and interest rates have peaked,” as Robert Harley pointed out in his Financial Review piece on why commercial property is at a turning point. Similar analyses have come from various other sources, including the Urban Land Institute. Even hard-hit real estate markets like New York City are turning around, speakers said at a ULI event earlier this month.

This broader trend is noteworthy in light of the recent deals involving senior housing. Take the Bridge acquisition by Apollo. Senior housing represents only about 6% of Bridge’s total fee-earning assets under management. With $22.3 billion in fee-earning AUM in Q4 2024, that translates to about $1.34 billion in the senior housing portfolio.

This obviously makes Bridge a major player in the sector, yet seniors housing is only a sliver of the Apollo transaction; by comparison 17% of Bridge’s fee-earning AUM is in multifamily while 10% is in workforce and affordable housing.

Apollo has not replied to my requests for comment, so I don’t have information from the firm about how senior housing played into the calculus to acquire Bridge. But it’s safe to say that Apollo sees value in the senior living market and is certainly no stranger to it. In 2018, Apollo acquired a portfolio of 22 Brookdale Senior Living (NYSE: BKD) properties, and the firm reportedly saw this portfolio as a launchpad for further investment in private-pay senior living.

Artemis likewise has a portfolio of diverse assets across the capital stack, including in residential, industrial, hospitality and other types of real estate. But the firm has expertise in senior housing, including through a 2018 investment in Silverado. Expanding “new products in alternative sectors including healthcare” is among the deal’s benefits for Barings, a Feb. 18 PERE article stated.

And Barings’ leadership anticipates the deal will set the firm up to take advantage of the coming real estate thaw, while also noting some sources of risk.

“We are cautiously optimistic about the real estate market in 2025,” Barings’ head of U.S. and European real estate told PERE. “We find this to be an overall favorable scenario for discerning investors. On the risk side, tariffs, inflation and geopolitical uncertainty bear watching, but overall we are positive.”

So, while senior housing has a compelling story for investors and is likely to draw further capital in 2025, the sector also could gain access to massive investor resources as part of these types of large transactions involving various types of property, beyond senior living. One question going forward is the extent to which major players like Apollo and Barings will pursue senior living specifically versus other asset types, but there’s no doubt about the potential for some major deals, accelerated investment pipelines and increased competition in senior living M&A.

At the same time, I don’t think that the senior living transaction market has fully thawed as acquisition criteria has “tightened up” for large institutional investors, as Balow told me, making deals market-specific and dependent on past relationships or proven operating performance.

Competition intensifies in 2025

The senior living industry is on the cusp of years-long demand growth in the form of the baby boomers, and I think that will mean the competition for senior living acquisitions will intensify in 2025.

Part of that is due to the simple fact that more investors see senior living in a positive light. Recent data from JLL Capital Markets showed a 24% increase in positive investor sentiment from 2024, as 78% of investors polled by JLL said they plan to increase their senior living portfolios in 2025. That dovetails with a recent outlook survey by Senior Housing News and Lument, in which half of respondents said their companies planned to buy senior living assets in 2025.

Lument Head of M&A Laca Wong-Hammond points out that “long-term capital managers such as pension and insurance funds” remain well-capitalized and “can only invest in optimized Class-A assets,” which Wong-Hammond said, will keep valuations stable.

“Clients in this realm have a choice in transaction timing and are differentiated among the ocean of distressed deals,” Wong-Hammond wrote.

Obviously, more potential suitors for senior living assets and portfolios mean more competition for those deals. The recent acquisitions by Apollo and Barings only add fuel to the fire for increased competition, allowing for brokers like Balow to “push values higher.”

In the past, institutional investors saw new growth through development, but as development has remained virtually stagnant, that’s shifted the attention towards acquisition opportunities, Balow said.

“While in-place cash flow is still the main driver of institutional interest levels, we are seeing more and more value-add deals for Class A assets that are getting significant institutional interest,” Balow added.

While these large institutions seek to fire away dry powder accumulated over the last three years, the broader lending environment continues to make these types of deals market-specific and dependent on a strong operating partner due to still-elevated interest rates and capital costs, along with tightened underwriting standards.

As institutional investors seek value-add acquisitions in 2025, I think that could lead to “disruptors” emerging in the senior living operating space. In particular, the current period is an opportunity to build new operating models that will further drive competition, True Connections Vice President of Marketing Geoff Duncan told me.

“More influence from institutional investors will push senior housing operators to continue to innovate with their operational processes,” Duncan added.

But that also means the pressure is on for operators as investors search for deals with more scrutiny than in the past as operators must provide more financial reporting information than in the past and be more transparent. I see similarities of operators partnering with institutional investors in aligning interests and improving transparency in the name to improve margin and how REITs have worked to form more RIDEA-based relationships with operators.

Senior living providers have taken steps in recent years to modernize their operating models, from integrating technology to improve staff and resident engagement to improving financial reporting capabilities to attract new investors.

“Operators that have invested in those things have seen more investors because they’re able to report accurate data on a daily basis, as opposed to saying, ‘I’ll have to wait to get the month-end reports,’” Elshire told me.

To me, this shows that operators must continue to drill down on net operating income results, moving beyond seeking occupancy gains and honing their operating models if they’d like to partner with institutional investors in the future.

I think this will lead to senior living providers to further improve their operating models with added financial reporting capabilities, and lead to a greater sophistication required to find future capital suitors.

As VIUM Capital Managing Director Grant Blosser pointed out, the senior housing sector being included as a separate asset class by the National Council of Real Estate Investment Fiduciaries (NCREIF) will only raise the visibility and help bring more interest to the industry.

In the fourth quarter of last year, senior housing led NCREIF’s institutional property returns data with a quarterly return of 2.07%, according to NCREIF.

“The last thing a [private equity] manager wants is to be under-allocated to an index that ends up performing well,” Blosser told me. “That’s a tough conversation to have with your investors.”

Ultimately, greater competition in senior living will only drive the evolution of the sector and help successful operators rise to the top as low development to favorable demographic trends should give investors confidence this year and beyond.

The post What the Recent Bridge, Artemis Acquisition Plans Mean for Senior Living M&A in 2025 appeared first on Senior Housing News.