Nonprofit CCRC growth shifts to expansions and mergers following financial downturn

In a recent meeting held by the Massachusetts Legislature on June 2, 2025, discussions centered around the evolving landscape of Continuing Care Retirement Communities (CCRCs) in the state. The meeting highlighted significant shifts in the sector, particularly in the wake of the financial crisis and the ongoing impacts of the COVID-19 pandemic.

Historically, prior to the 2008 financial crisis, many nonprofit CCRCs expanded by constructing new campuses. However, the downturn in real estate significantly hindered this growth model. For instance, the Groves at Lincoln, a local nonprofit CCRC, was unable to survive the economic challenges and was sold to a for-profit entity. This trend has led to a marked decline in the establishment of new campuses, with current averages dropping to just one or two new openings per year, compared to 12 to 14 before the crisis.

The meeting underscored that most growth in the CCRC sector is now occurring through expansions of existing facilities or through mergers and acquisitions, rather than the construction of new campuses. This shift reflects a cautious approach among nonprofit organizations, which are now more inclined to expand their current operations rather than take on the risks associated with new developments.

Another critical topic discussed was the impact of an aging resident population on the financial health of CCRCs. As residents increasingly require assisted or skilled care, the financial performance of these communities is closely tied to their ability to manage healthcare access and utilization. Experts noted that if CCRCs budget effectively based on actuarial estimates of healthcare needs, they can maintain financial stability. However, staffing challenges remain a significant concern, affecting the overall operation of these communities.

The meeting also touched on the types of contracts offered by CCRCs and how they assess potential residents' financial preparedness for future care needs. While some organizations do not consider long-term care insurance in their admissions process, they emphasize the importance of having contingency plans in place to accommodate unexpected healthcare demands.

In terms of future directions, nonprofit developers are primarily focusing on expanding existing CCRC campuses rather than venturing into new types of housing. There is a notable trend towards enhancing home and community-based services, reflecting a shift in how these organizations are adapting to the needs of their residents.

Overall, the discussions at the Massachusetts Legislature meeting highlighted the challenges and adaptations facing the CCRC sector. As the demand for senior care continues to evolve, the strategies employed by these organizations will be crucial in ensuring their sustainability and the well-being of their residents. The meeting concluded with a call for nonprofit CCRCs to consider taking on more risks to foster growth and innovation in the sector.