The retirement of C-suite executives and changes in the healthcare system contributed to record-level merger and acquisition activity in 2016 in the not-for-profit sector of senior living, according to specialty investment bank Ziegler.

“This increased activity is not necessarily a surprise, as many of the drivers from recent years remain in place and are arguably exerting greater pressures than in previous times,” Lisa McCracken, Ziegler’s senior vice president of senior living research and development, wrote in the most recent issue of “Senior Living Finance Z-News,” a company newsletter. “Additionally, not-for-profit senior living has often followed several years behind the hospital and health system trends, which saw its consolidation activity peak a few years ago,” she added.

As senior living organizations search for successors to their retiring baby-boomer CEOs, they’re also discussing affiliations, McCracken said. Mergers and acquisitions also are being driven by healthcare reform, payment reform and changes in skilled nursing. “Scale and the ability to have in-house experts related to this service line are increasingly important,” she said.

More than 91 not-for-profit market-rate communities changed their sponsor or owner status in 2016, according to Ziegler. Of 60 transactions, some of which involved multiple sites, 49% involved transitions from not-for-profit to for-profit status. McCracken said that 2016 also saw a larger number of not-for-profit organizations acquiring for-profit assets.

When factoring in for-profit organizations, overall merger and acquisition activity for seniors housing in 2016 appears to have been slightly less than in 2015, she said.