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September
14-16, 2026

September 14-16, 2026

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Senior Living Glossary

NOI (Net Operating Income)

NOI, or Net Operating Income, is a senior housing community’s total revenue minus operating expenses, excluding debt service, capital expenditures, income taxes, and depreciation. It is the primary measure of a community’s operating profitability.

Why It Matters

NOI is the foundation of most senior housing valuations, lender covenants, and investor return calculations. Because it excludes financing and capital costs, it isolates the pure operating performance of the asset, making it comparable across communities and portfolios. Improvements in NOI can come from revenue growth, expense management, or both, and the strongest operators pursue both simultaneously rather than treating cost-cutting as the only lever.

The Austera Group Perspective

Occupancy gets most of the attention in senior housing operational conversations, but NOI is what ownership actually values. The most consequential NOI improvements often come from work that does not show up on a marketing dashboard: pricing discipline, care mix optimization, length of stay improvements, and disciplined referral fee management. Communities that focus exclusively on filling the building without attending to the economics behind each move-in can operate at high occupancy while producing disappointing NOI.

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Frequently asked questions.

What is a healthy NOI margin in senior housing?

NOI margins vary significantly by care level and community type. Independent living communities often operate at 30 to 40 percent NOI margins, while assisted living typically operates in the mid-20s to low 30s, and memory care can be higher due to premium pricing.

How is NOI different from EBITDA?

In senior housing, NOI typically excludes corporate overhead and management fees, while EBITDA includes them. NOI is the community-level operating measure; EBITDA is the enterprise-level measure.

What is the fastest way to improve NOI?

Usually a combination of pricing alignment, referral fee reduction, and length of stay improvement. Cost-cutting alone rarely produces sustainable NOI growth.

Ready to talk about your community?

If you’re weighing an acquisition, working through a repositioning, or trying to understand why occupancy isn’t where it should be, we can help you see the situation clearly.