Assisted Living Facilities for the Elderly (U.S.) — NAICS 623312

A Histometrics industry primer for public-market and private investors.

1. Overview

Assisted living is the middle rung of senior housing: residential communities where mostly older adults get an apartment plus meals, housekeeping, social programming, help with the activities of daily living (ADLs — bathing, dressing, medication reminders, mobility), and 24-hour non-medical staff supervision — but not the round-the-clock skilled medical care of a nursing home. It sits between independent living (housing only) and skilled nursing (a licensed medical facility).

This is not really a "stock market sector." Most operating activity is local and privately held — for-profit companies, nonprofits, family operators, private-equity-backed platforms — and the real estate is often owned separately from the business that runs the community. The investment case rests on one of the most predictable demand curves in the economy (the aging of the U.S. population) meeting a supply of new buildings constrained by high construction costs and a tight labor market. It is also overwhelmingly private-pay: residents and families write the checks, which gives well-located operators real pricing power but ties demand to household wealth and home values.

Two broad ways in, both covered in sections 4 and 10:

• Public investors get exposure mainly through real estate investment trusts (REITs) that own senior-housing buildings, a couple of pure operating companies, and diversified post-acute-care platforms with an assisted-living slice.
• Private investors participate directly — buying, building, managing, or lending against communities, or backing them through private-equity and real-estate funds.

The main counterweights to the demand story are labor intensity, affordability, state-by-state regulation, liability, and the need to hit high occupancy in each individual local market.

2. What it is, and how it's structured

The federal definition (NAICS — North American Industry Classification System — code 623312) covers establishments providing residential and personal-care services without on-site nursing-care facilities for the elderly or others who cannot fully care for themselves.[1] Services generally include room, board, supervision, housekeeping, activities, and help with ADLs. Revenue is a bundled monthly fee: a base charge for the apartment plus tiered service/care charges that rise with a resident's needs ("acuity").

What this code excludes — important, because it shapes the federal numbers:

• Continuing care retirement communities (NAICS 623311) — campuses that combine independent living, assisted living, and on-site nursing under one roof. Assisted living delivered inside a CCRC is counted there, not in 623312.[1]
• Nursing care / skilled nursing facilities (NAICS 623110) — assisted-living or rest homes that add on-site nursing care get reclassified here.[1]
• Lessors of residential buildings (NAICS 531110) and independent-living / retirement housing without care services.[1]
• Home health care services (NAICS 621610), delivered to people in their own homes.

A single senior-living campus may contain several of these businesses at once, each with different economics and classification, so federal statistics do not give a clean national count of assisted-living beds by care type.

The opco/propco split. This is a fragmented, private-sector industry — not government-run and not dominated by a few giants. It runs from national brands operating hundreds of communities down to single "residential care homes" with a dozen beds. Its defining structural feature is the separation of two components:

1. Operations — resident acquisition, staffing, care delivery, food service, programming, billing, and compliance (the "opco").
2. Real estate — land, buildings, financing, leases, and property-level capital spending (the "propco").

An operator may own its building, lease it from a REIT, or manage it for a separate owner. That split is what makes the sector investable from both the real-estate side and the operating side. Federal business statistics do not publish a national split of the industry by ownership type.

3. How big it is

Ground-truth U.S. federal figures for NAICS 623312 (note the reference years differ, so do not divide receipts by employees to derive margins):

The concentration numbers tell the core story: the largest four firms hold under 16% of revenue, and the HHI — the standard market-concentration score, where 10,000 is a monopoly and anything under 1,500 is "unconcentrated" — is just 86.7. This is an extremely fragmented industry. The SBA (Small Business Administration) threshold is an eligibility line, not a measure of industry size.

The undercount caveat. These figures understate assisted living as consumers experience it, for three reasons. First, County Business Patterns counts employer establishments with paid staff — it excludes nonemployer businesses, some public-sector facilities, and it counts physical locations, not beds, capacity, or residents.[2] Second, the code deliberately carves out assisted living that sits inside CCRCs (623311) or alongside nursing care (623110), so a large share of real-world assisted-living beds lands in adjacent codes. Third, industry trade counts use a broader "community" definition: the American Health Care Association / National Center for Assisted Living (AHCA/NCAL) counts roughly 41,000+ assisted-living communities with well over 1 million licensed beds and more than 1 million residents — well above the 20,884 establishments in 623312.[5] Private market-research estimates of the broader "assisted living market" run $45–52 billion for 2025–2026.[6] Treat the ~$38.9B federal receipts figure as the anchor for the narrowly defined industry, and the trade/research figures as the broader senior-housing lens.

4. The investable universe

There are few pure-play public operators of assisted living. Most listed exposure is through healthcare REITs that own the real estate (and increasingly capture the operating profit too), plus two operating companies and a couple of diversified post-acute platforms. The largest operators by unit count are mostly private, often private-equity-backed.

Public companies (community/unit counts from year-end 2025 SEC filings; these are moving targets):

Healthcare REITs with heavy senior-housing exposure (own the buildings; some now capture operating results directly — see section 5). Market caps are approximate, span all their property types, and move with markets:

Largest operators overall (mostly private). Argentum's 2025 "Largest Providers" report ranks operators by voluntarily reported assisted-living units (as of Dec 31, 2024, excluding skilled-nursing units); by that measure LCS, Erickson Senior Living, Discovery Senior Living, Brookdale, and Atria were among the largest, with reported AL-unit counts on the order of ~24,000 (LCS), ~23,000 (Erickson), ~16,000 (Discovery), ~15,000 (Brookdale), and ~15,000 (Atria).[14] Treat these as directional: unit definitions and self-reporting vary, so counts are not strictly comparable across providers or against Brookdale's own 10-K resident-capacity figure.

Other major non-listed owner-operators and management platforms include Sunrise Senior Living, Oakmont Management Group, Gardant Management Solutions, Senior Lifestyle, Sagora Senior Living, Merrill Gardens, Brightview Senior Living, Cogir Management USA, Life Care Services (LCS), and nonprofit systems such as HumanGood and Ebenezer Society.[14] Provider scale does not equal property ownership: many large managers run buildings owned by REITs, nonprofits, or private funds. The Five Star Senior Living / AlerisLife wind-down illustrates the distinction — Diversified Healthcare Trust reported those management agreements moved to other managers during 2025.[15]

Bottom line for public-market investors: to own "assisted living" you are mostly buying a REIT landlord (real-estate cash flows and dividends), one of two operating companies (operating leverage), or a diversified post-acute platform where assisted living is only one component. The biggest operating brands are largely in private hands.

5. How the money works

Owners make money on the spread between what residents pay and what it costs to house and care for them — with heavy occupancy leverage, because costs are largely fixed once a building is staffed and open.

Revenue = occupancy × rate. The two metrics that matter most:

• Occupancy — the share of units filled. Assisted-living occupancy in the National Investment Center for Seniors Housing & Care (NIC) primary markets reached ~87.7% in Q4 2025, with senior housing overall nearer ~89% after a long run of quarterly gains; new inventory grew under 1% in the quarter.[16] High fixed costs mean each additional occupied unit drops a large share of its revenue straight to profit, so occupancy swings drive earnings — and a weak lease-up can produce substantial losses.
• RevPOR (revenue per occupied room) — average monthly revenue per filled unit, the sector's equivalent of a hotel's room rate. CareScout's 2025 Cost of Care survey put the national median assisted-living price at $6,200/month (~$74,400/year), up roughly 5% year-over-year after a ~10% jump the prior year; NIC reported assisted-living asking rates up ~6.6% year-over-year in late 2025.[16][17] (These are consumer-price references, not NAICS 623312 receipts.) Operators push RevPOR through annual rate increases plus "acuity creep" — charging more as residents need more help, including separate memory-care pricing.

Who pays. This is a private-pay industry: the large majority of residents pay from income, savings, home-sale proceeds, or long-term-care (LTC) insurance, and only roughly one in six relies on Medicaid for the service (not room-and-board) portion.[5] Medicare does not cover assisted living's custodial care, though it may pay for separately billed clinical services delivered on site (e.g., hospice). Medicaid support flows through state Home and Community-Based Services (HCBS) waivers, which pay lower rates and have capped slots, so operators generally prefer private-pay residents.

Cost structure. Labor is the swing factor — on the order of ~55% of operating expense — followed by food, insurance, utilities, maintenance, property taxes/rent, marketing, and compliance. The federal median wage for aides in assisted-living and continuing-care settings was about $36,280 in May 2024 (BLS — Bureau of Labor Statistics).[18] When wages rise faster than rates, margins compress; when rate growth outruns wages, they expand.

Two profit engines, one asset. Because of the opco/propco split:

• The property owner earns real-estate returns — either fixed rent under a triple-net lease (the operator-tenant pays rent, taxes, insurance, maintenance) or the actual property net operating income (NOI) under a seniors-housing operating portfolio (SHOP) structure. SHOP is enabled by RIDEA (the REIT Investment Diversification and Empowerment Act), which lets a REIT capture operating upside — and downside — rather than only collect rent.
• The operator earns the operating profit or a management fee.

The biggest REITs have been shifting from fixed-rent leases toward SHOP to capture the occupancy-and-rate recovery directly: in 2025 Ventas crossed 50% of income from senior housing and Welltower moved toward getting most of its income from the segment.[12][11] Developers, meanwhile, judge a project by its development yield (stabilized NOI ÷ total cost) versus the cap rate (market yield) at which finished communities trade.

6. What drives demand

• Demographics — the dominant, forward-looking driver. The first baby boomers turn 80 in 2026, pushing a growing cohort into the highest-need years for assisted living and memory care.[8] The U.S. population age 65+ reached 61.2 million (18.0% of the population) in 2024;[19] the 80+ band — the prime age for assisted living — is projected to grow by roughly 4 million (about 27%) between 2025 and 2030.[20] Researchers estimate the sector needs hundreds of thousands of additional units by 2030 just to hold current penetration rates.[20]
• Acuity and dementia. Residents are typically the "oldest old" (85+); roughly 40% live with Alzheimer's or another dementia, and most need help with ADLs.[5] Nationally, the CDC (Centers for Disease Control and Prevention) estimates ~6.7 million older Americans have Alzheimer's today, rising toward ~14 million by 2060.[21] Rising acuity both fills units and lifts RevPOR.
• Caregiver availability. Demand rises when adult children can't provide full-time care — a function of geographic dispersion and female labor-force participation — and when hospital/rehab discharges need a residential step-down setting.
• Ability to pay. Because it's private-pay, demand tracks retiree wealth, home equity, and equity markets; strong home values help families fund a move-in.
• Supply constraints (a support, not a driver). High interest rates and construction costs have slowed new development to a trickle relative to demand, tightening occupancy and handing existing owners pricing power.[6][16] Labor is both an enabler and a constraint: BLS projects home-health and personal-care aide employment to grow ~17% from 2024 to 2034, but recruiting enough workers remains the binding operational challenge.[18]

7. Regulation

The defining regulatory fact: assisted living is state-regulated, with no federal licensing regime. Unlike nursing homes — which must meet federal Centers for Medicare & Medicaid Services (CMS) "Conditions of Participation" — assisted living has no federal equivalent. Each state (plus D.C.) sets its own rules for licensure, staffing, training, medication administration, dementia care, resident assessment, permissible acuity, disclosure, inspection, emergency preparedness, building codes, and admission/discharge — so operators face 50-plus different regimes.[22] Do not apply nursing-facility (623110) certification and reimbursement rules automatically to a 623312 facility.[1]

Federal influence is indirect, arriving mainly through Medicaid: states that use Medicaid dollars to help pay for assisted-living services must meet federal HCBS-waiver requirements, but the waiver defines financing, not a new license category. As of early 2025, Medicaid programs in 44 states covered some assisted-living services for older adults and people with disabilities, and 29 states used HCBS waivers for that purpose.[23] Other applicable federal law includes Medicare rules for separately billed clinical services, Americans with Disabilities Act (ADA) accessibility and nondiscrimination requirements, fair-housing law where applicable, and federal labor, workplace-safety, privacy, and fraud/abuse statutes.[23] This light-touch, state-by-state structure is one reason private capital finds the sector attractive — and, increasingly, a focus of policymakers scrutinizing consolidation and ownership.

8. Competitive dynamics and consolidation

The federal concentration data (CR4 15.7%, HHI 86.7) confirm a highly fragmented national market.[3] It splits roughly into three tiers: national brands (Brookdale, Sunrise, Atria, Discovery, LCS), regional operators, and a long tail of small independent homes.

Competition is intensely local — a resident chooses among communities within a short drive of family — so reputation, referral networks (senior-placement services and hospital discharge planners), physical quality, staffing quality, and available care levels matter more than national market share. Scale can nonetheless improve marketing and digital lead generation, referral conversion, purchasing, training and compliance, revenue management, and recruiting; local density improves operating efficiency. But large platforms can also carry bureaucracy, uneven quality, and integration risk — national scale alone is not a moat.

The consolidation engine is capital, not a single dominant operator. Two forces are reshaping ownership:

• REIT roll-ups. In 2025 Welltower announced roughly $23 billion of transactions and the acquisition of 900-plus senior-living communities, while Ventas acquired 52 senior-housing communities and American Healthcare REIT closed further deals — concentrating real-estate ownership even as day-to-day operations stay split among many operators.[11][12][13]
• Operator M&A and private equity. LCS completed its acquisition of Vi in May 2026, creating a combined platform of ~130 communities, 27,000 employees, and 45,000+ residents across 29 states; Sonida closed its CNL Healthcare Properties acquisition in March 2026.[24][8] Private-equity firms are drawn by the demographic tailwind, private-pay cash flows, and the absence of federal AL rules; they typically own the real estate and select/support operators.[25]

Judgment: consolidation should continue, because fragmented ownership, demographic demand, and limited new development create opportunities to buy under-managed communities and lift occupancy. But the strongest platforms are likely to be those with local density, reliable staffing, credible care outcomes, pricing power, and conservative real-estate leverage — not simply the biggest. PE involvement has drawn policymaker attention, with several states advancing 2025 legislation targeting healthcare consolidation.[26]

9. Risks

• Labor. Wage inflation, turnover, absenteeism, agency/contract staffing, and immigration-policy shifts are the number-one operating risk; with labor ~55% of costs, a wage spike directly compresses margins.[18]
• Occupancy and oversupply. Earnings are highly sensitive to occupancy; a local building boom, weak sales execution, or a demand shock (COVID-19 drove severe occupancy and reputational damage in 2020–21) can hit a market hard.
• Affordability ceiling. At a ~$74,400/year median, private-pay assisted living is out of reach for many middle-income seniors, capping the addressable market and exposing operators to recessions and housing downturns; the underserved "middle market" is a well-known gap.[17]
• Quality and liability. Falls, medication errors, abuse/neglect, infection outbreaks, and poor clinical escalation create litigation, regulatory sanctions, and reputational damage.
• Interest rates and capital intensity. This is a real-estate-heavy business: higher rates raise financing costs, pressure REIT valuations, and lift the cap rates at which assets trade, cutting property values and complicating refinancing.
• Regulatory and payer exposure. Fifty-plus state regimes create compliance complexity; states may tighten staffing/training/reporting rules; and for the Medicaid-waiver minority, reimbursement often runs below cost, with capped enrollment.[26]
• Operator–owner conflict. REIT, private owner, and manager can have different incentives around staffing, rent, and capital spending.
• Measurement risk. NAICS, state licensing, and industry surveys classify mixed-care campuses differently, limiting comparability across data sources.

10. How to invest, and the outlook

Public-market routes — separate three distinct exposures:

1. Operating equity — occupancy, pricing, staffing, care quality, and operating margins. Brookdale (BKD) and Sonida (SNDA) are the main listed operators, offering leveraged exposure to the occupancy-and-rate recovery but carrying operating and balance-sheet risk.[7][8]
2. Healthcare real estate — property values, rents, debt costs, and operator credit. REITs are the primary way to own senior housing publicly: diversified large caps (Welltower, Ventas) give the broadest exposure with dividend income; SHOP-heavy names give more direct operating upside/downside, while triple-net names (parts of Sabra, NHI, LTC, Omega, CareTrust, AHR) offer steadier contractual rent. REIT investors watch occupancy, RevPOR, same-store NOI growth, and funds from operations (FFO — the standard REIT cash-flow measure).[11][12]
3. Diversified post-acute care — platforms like NHC and Ensign where assisted living is one slice of a broader healthcare business.

Private routes. Direct ownership is well within reach — the SBA classifies assisted-living firms with up to $23.5 million in receipts as small businesses [4] — via buying and operating an existing community; ground-up development (judged on development yield vs. cap rate); net-lease or joint-venture ownership of the real estate with a third-party operator; or LP stakes in private-equity and real-estate funds specializing in seniors housing. Franchising is minimal; the dominant private model is the opco/propco structure. Underwrite each local market, not the national demographic average: key diligence questions are how much competing capacity sits within the local radius; whether the property is stabilized, in lease-up, or losing residents; whether rates can rise without triggering move-outs; staffing cost/turnover/agency usage; the private-pay share; who owns the real estate and controls capital spending; and whether the debt structure survives an occupancy or rate downturn.

Outlook (forward-looking judgment). The demand case is unusually clear: an accelerating 80+ population and rising dementia prevalence meet a development pipeline throttled by cost and interest rates, which should keep occupancy climbing and preserve pricing power for well-located, well-run communities into the 2030s.[16][20][21] But demographics support demand — they do not guarantee pricing power, margins, or returns, and results will be uneven. The binding constraints are on the supply and cost side: the availability and price of labor, and the affordability ceiling for private-pay residents. Near-term signals to watch: the pace of occupancy recovery toward 90%, rate (RevPOR) growth versus wage growth, the trajectory of interest rates and construction starts, and continued REIT/PE consolidation of ownership.

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Sources

1. U.S. Census Bureau, "2022 North American Industry Classification System: 623312 Assisted Living Facilities for the Elderly" (definition and exclusions). https://www.census.gov/naics/?details=623312&input=623312&year=2022
2. U.S. Census Bureau, County Business Patterns: 2023 (NAICS 623312 — establishments, employment, annual and Q1 payroll). https://www.census.gov/data/datasets/2023/econ/cbp/2023-cbp.html
3. U.S. Census Bureau, "EC2200SIZECONCEN: Concentration of Largest Firms for the U.S.: 2022" (NAICS 623312 — receipts, firms, CR4/CR8/CR20/CR50, HHI). https://api.census.gov/data/2022/ecnsize/groups/EC2200SIZECONCEN.html
4. U.S. Small Business Administration, "Table of Small Business Size Standards" (NAICS 623312 — $23.5M), 2023. https://data.sba.gov/dataset/small-business-size-standards
5. American Health Care Association / National Center for Assisted Living (AHCA/NCAL), "Assisted Living Facts & Figures" (communities, beds, residents, payer mix, dementia share), 2024–2025. https://www.ahcancal.org/Assisted-Living/Facts-and-Figures/Pages/default.aspx
6. Grand View Research, "U.S. Assisted Living Facility Market Size Report" (broad market-size estimate), 2025–2026. https://www.grandviewresearch.com/industry-analysis/us-assisted-living-facility-market
7. Brookdale Senior Living Inc., 2025 Annual Report (Form 10-K) — 584 communities, ~51,000 resident capacity. https://www.sec.gov/Archives/edgar/data/1332349/000133234926000032/bkd-20251231.htm
8. Sonida Senior Living, Inc., 2025 Annual Report (Form 10-K) — 96 communities, ~10,150 capacity; CNL Healthcare Properties acquisition. https://www.sec.gov/Archives/edgar/data/1043000/000104300026000009/snda-20251231.htm
9. National HealthCare Corporation, 2025 Annual Report (Form 10-K) — 26 assisted-living facilities, 1,413 units. https://www.sec.gov/Archives/edgar/data/1047335/000143774926005910/nhc20251231_10k.htm
10. The Ensign Group, Inc., 2025 Annual Report (Form 10-K) — senior-living segment. https://www.sec.gov/Archives/edgar/data/1125376/000112537626000007/ensg-20251231.htm
11. Welltower Inc., 2025 Annual Report and "Welltower Announces $23 Billion of Transactions…," Oct. 27, 2025. https://welltower.investorroom.com/2025-10-27-Welltower-Announces-23-Billion-of-Transactions-and-Intensified-Focus-on-Seniors-Housing
12. Ventas, Inc., 2025 Annual Report (Form 10-K) — senior housing >50% of NOI; 52 communities acquired in 2025. https://www.sec.gov/Archives/edgar/data/740260/000074026026000006/vtr-20251231.htm
13. American Healthcare REIT, Inc., 2025 Annual Report and full-year acquisition activity. https://www.sec.gov/Archives/edgar/data/1632970/000119312526082692/ahr-20251231.htm
14. Argentum, "2025 Largest Providers Report" (voluntarily reported assisted-living units as of Dec. 31, 2024), July 2025. https://www.argentum.org/wp-content/uploads/2025/07/2025-Largest-Providers.FINAL_.pdf
15. Diversified Healthcare Trust, 2025 Annual Report (Five Star / AlerisLife management-agreement transfers). https://www.sec.gov/Archives/edgar/data/1075415/000110465926032079/tm263087d2_ars.pdf
16. National Investment Center for Seniors Housing & Care (NIC), "Occupancy Rate for Senior Living Communities Increased in 2025 as Construction Stalled" (AL occupancy ~87.7%, Q4 2025). https://www.nic.org/news-press/occupancy-rate-for-senior-living-communities-increased-in-2025-as-construction-stalled/
17. CareScout (Genworth), "2025 Cost of Care Survey" (median assisted living $6,200/month); NIC assisted-living asking-rate growth, 2025. https://www.carescout.com/cost-of-care
18. U.S. Bureau of Labor Statistics, "Home Health and Personal Care Aides" — Occupational Outlook Handbook (median wage $36,280, May 2024; +17% employment 2024–2034), 2025. https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm
19. U.S. Census Bureau, "Older Adults Outnumber Children in 11 States…" (65+ = 61.2M, 18.0% of population, 2024), 2025. https://www.census.gov/newsroom/press-releases/2025/older-adults-outnumber-children.html
20. National Investment Center for Seniors Housing & Care, "The Impending Age Wave" (80+ population and unit-need projections), 2025. https://www.nicmap.com/blog/the-impending-age-wave-navigating-the-urgent-need-for-senior-housing/
21. Centers for Disease Control and Prevention, "About Dementia" (6.7M with Alzheimer's, ~14M projected by 2060), 2024. https://www.cdc.gov/alzheimers-dementia/about/index.html
22. U.S. Department of Health & Human Services, ASPE, "Compendium of Residential Care and Assisted Living Regulations and Policy" (state-by-state regulation). https://aspe.hhs.gov/reports/compendium-residential-care-assisted-living-regulations-policy-2015-edition
23. U.S. Government Accountability Office, "Assisted Living Facilities: Information on Federal Spending and Medicaid Coverage" (44 states cover AL services; 29 use HCBS waivers), 2026. https://www.gao.gov/products/gao-26-107884
24. LCS, "LCS Announces Successful Close of Vi Acquisition" (~130 communities, 27,000 employees, 45,000+ residents, 29 states), May 2026. https://www.lcsliving.com/resources/for-seniors/community-news/lcs-announces-successful-close-of-vi-acquisition/
25. Health Affairs Scholar, "Why and how is private equity involved in assisted living," 2025. https://academic.oup.com/healthaffairsscholar/article/4/6/qxag118/8684183
26. McKnight's Senior Living, "Private equity, consolidation divide aging services sector…" (2025 state legislation on healthcare consolidation). https://www.mcknights.com/news/private-equity-consolidation-divide-aging-services-sector-as-multi-agency-effort-gets-underway/