PACE Tenants Deliver the Stability Investors Want and the Impact Communities Need
Why mission-driven healthcare tenants are becoming some of the most dependable anchors in real estate.
At this year’s National PACE Association conference, one theme stood out: PACE is in a position to shift from niche to mainstream. It’s no longer a small corner of senior care. It’s one of the most effective, sustainable care delivery models in the country.
That shift impacts more than operators, it’s something property owners and investors should take a close look at for their portfolios. If you own healthcare-zoned space in a community with an aging population, a PACE center could be the most stable, high-impact tenant in your portfolio.
Many landlords still see PACE as risky or untested. The reality is the opposite.
1. Financial Stability That’s Vetted Twice
It’s easy to assume a new PACE operator is a startup with no credit. In practice, few organizations make it to the leasing stage without extensive due diligence.
Every PACE program is reviewed by both state and federal regulators. Applying for approval means the operator’s leadership, financials, and compliance systems are examined in detail. If they’ve made it to real estate negotiations, they’ve already passed layers of oversight that most healthcare companies never face.
On top of that, PACE startups attract serious investors—healthcare-focused venture and private equity groups that specialize in long-term, infrastructure-heavy models. These firms know half of their investment will be spent before day one of operations. If they’re backing a team through that, it’s because they’ve seen a clear path to scale.
Between government review and institutional capital diligence, there’s very little about a PACE operator that hasn’t been tested.
2. Long-Term Tenants With Heavy Capital Investment
PACE centers are built to stay put. A typical site runs 15,000–25,000 square feet and requires $5 million or more in interior buildout. Once the walls go up, they aren’t coming down.
These facilities are a combination of primary care, adult day care, rehab, and offices. It’s essentially a senior center with high-quality, high-touch healthcare. They’re highly regulated, licensed, and designed for continuity. Moving any PACE center disrupts participant care and requires starting from scratch with capital investment and regulatory approvals.
Tenants commit to long-term leases—often 10 years or more—and continue to reinvest in their space over time. A center serving 300–400 participants generates at least $30–40 million in annual revenue. That’s comparable to a strong grocery anchor, but with higher margins and lower volatility.
For landlords, that means stable income and almost no rollover risk.
3. Turning Struggling Assets Into Community Landmarks
Every community has that building — the one people avoid mentioning, the one where something always seems to be happening in the parking lot, the one everyone drives past and says, “someone should really do something with that place.”
I’ve experienced it as the co-tenant to the vacant anchor. They become magnets for crime, vandalism, and decline. Staff in nearby businesses feel unsafe walking to their cars. A property’s reputation shifts from being a community fixture to being a community risk.
When a PACE center moves in, you can feel the difference. I’ve walked those same sites before and after — the noise, the energy, the pride are completely different. Members of the community know and respect that this organization is providing care for their neighbors, friends, and family members.
The same properties that once drew complaints start drawing appreciation, and the problems that used to define the site — loitering, theft, safety concerns — disappear almost overnight.
Construction crews arrive, façades are repaired, signage is upgraded, lighting is improved, and suddenly there’s movement and life where there was neglect. The center opens, and instead of being known for what used to happen there, the building becomes known for what it gives back — health, connection, and care for older adults.
Bringing in a PACE tenant restores a community asset.
It transforms not just the physical property, but how people feel about the space — and about the owner who invested in it.
4. Sophisticated Operators, Low Management Burden
PACE tenants aren’t small business owners learning as they go. They’re healthcare providers accountable to regulators, investors, and participants (and their families).
PACE organizations are required, by regulation, to maintain building systems and keep logs of maintenance.
They maintain their facilities at clinical standards—HVAC, life safety, and infection control included. That means fewer emergency calls, better property condition, and a consistently maintained environment.
For landlords managing multi-tenant centers, that level of operational discipline reduces management time and improves property performance across the board.
5. A Perfect Fit for Long-Term Hold Strategies
PACE works best for landlords who play the long game.
Short-term investors looking for a quick exit may struggle to underwrite early-stage operators. But for medium and long-term holders focused on stable income and predictable growth, these tenants are ideal.
Within a few years, most centers reach $10–20 million in annual revenue and hit breakeven. Once that happens, they’re locked in for the long term.
PACE operators are not chasing trends or testing a new model. PACE began with On Lok in 1971, and was formally recognized as a permanent provider type under Medicare and Medicaid through the Balanced Budget Act of 1997. While “wellness” programs are hot right now, PACE has spent decades quietly proving what real outcomes look like.
Unlike a lot of healthcare startups, PACE operators are not simply chasing the next funding round or exit. They’re building care infrastructure for the next 20 years—facilities that anchor neighborhoods, stabilize portfolios, and serve the fastest-growing segment of the population.
6. Building Upgrades That Strengthen the Asset
Every PACE buildout improves the building it occupies. Electrical and plumbing upgrades, seismic work, ADA compliance, new roofs, new mechanical systems, and sometimes façade painting or ACM and lead paint remediation.
Depending on the lease structure, the costs may be shared, but the benefit is mutual. They extend the lifespan of the building and increase its long-term value.
PACE tenants have to maintain their facilities at a level far above most users, and they typically do so with dedicated facilities management staff or outsourced clinical-grade maintenance partners.
That commitment to quality protects both their operation and your investment.
7. Revenue Power and Demographic Tailwinds
PACE isn’t a short-term bet. Instead, it’s a demographic certainty. The U.S. older adult population is expected to double over the next two decades, and the number of adults with chronic conditions and functional limitations continues to rise. Every one of those individuals represents a growing need for coordinated, community-based care.
Unlike many healthcare startups chasing new models, PACE has five decades of proof behind it. Programs that start today are positioning themselves to meet the healthcare needs of the next generation of older adults.
From a real estate perspective, that translates into durability.
The model’s funding is tied to Medicare and Medicaid, giving it predictable reimbursement.
The facilities are expensive to build, but even harder to replace, ensuring tenants stay.
Demand for services outpaces available programs in nearly every major metro.
For investors, that combination—stable reimbursement, immovable tenants, and accelerating demand—makes PACE one of the most under-appreciated long-term opportunities in healthcare real estate.
Conclusion: Understanding the Real Value of PACE
PACE centers aren’t speculative plays. They’re built for longevity, designed to serve communities, and structured to generate stable, predictable returns for property owners.
For investors and landlords who understand the fundamentals, partnering with PACE operators is a way to future-proof portfolios while improving the communities they invest in.
I’m currently working with clients looking to partner with investors to acquire and develop properties for PACE programs. If you want to learn how these centers can deliver both financial stability and community impact, reach out — it’s a conversation worth having.