The Seniors Housing Lending Environment:
|
Our series of interviews with key industry leaders is taking a break for the holidays.
Look for an interview with Jerry Doctrow, Managing Director, Stifel, Nicolaus & Co.,
in the January 2009 edition of the NIC Insider.
|
|
|
NIC MAP® Releases 3Q08 Data
|
|
The Numbers Behind the Occupancy Rate Decline for Independent Living
|
Data from NIC MAP® reveal that occupancy rates for IL properties
have been declining since 1Q07. Occupancy rates reached a recent peak in 1Q07 at 93.8% for IL. Since
then, occupancy has declined by 340 basis points (bps) to 90.4%. In the most recent quarter, the rate
of decline has accelerated, dropping 100 bps from 91.4% in 2Q08.
Falling occupancy is the result of supply exceeding demand. While that is clearly the case for IL, it
does not reveal the entire story behind recent declines in occupancy. Since 1Q07 (recent high for IL
occupancy), supply has grown by 4.7%, or roughly 12,750 units in the top 31 Metro Markets. During this period,
absorption (demand) has grown by 3,280 units. As a result, supply has exceeded demand by 9,470 units
and caused occupancy to fall. Compare these numbers to the six quarter period up to 1Q07 and you would
see that demand was positive by 12,877 units while supply grew by only 9,248 units, leading to occupancy
increases.
A point to consider is that absorption, or demand, is still positive. This could certainly be viewed
as good news for a sector that is thought to have significant exposure to falling asset values (home
equity and stocks).
On a market by market basis, the reasons for occupancy declines become a bit clearer. “Generally, those
markets that have seen significant declines in residential housing values have also seen the most dramatic
falls in IL occupancy rates," says Robert Kramer, President, NIC. An example would be Tampa, Florida
where, according to the popular S&P Case Shiller index, house values have declined by 24% since 1Q07.
During this period, IL occupancy has eroded by 1,100 bps, from 95.6% to 84.5%. There are some exceptions
to this rule, however. Chicago, for instance, has seen occupancy decline by 630 basis points from 92.4%
in 1Q07 to 86.1% in 3Q08. Chicago’s home price, according to S&P Case Shiller, has declined by 11% during
this period, not to the level of other hardest hit areas. Supply may be the culprit in Chicago, as IL
supply has increased by 7.0% during the past 2 years.
While occupancy is certainly declining, it is easy to see there are many factors at play. NIC MAP subscribers
are afforded the benefit of being able to constantly monitor these and many other data points market
by market and submarket by submarket. For more information, please contact Michael Hargrave at
mhargrave@nic.org or 410-267-0504.
|
For just $299 you can begin your local market analysis with the purchase of a NIC MAP Metro Market Report.
Purchase your 3Q08 NIC MAP Metro Market Repot Today!
Contact Amber Jacobs for more information.
|
|
Seniors Housing & Care
Industry Calendar |
|
January 2009:
- 8 NIC Executive Circle Webcast
- 12-13 ASHA Annual Meeting, Monarch Beach, CA
- 13 NIC Executive Committee & Conference Planning Committee Meetings, Monarch Beach,
CA
- 20-23 NAHB International Builders Show, Las Vegas, NV
- 26-27 AAHSA Leadership Summit, San Francisco, CA
February 2009:
- 10-13 Erickson School - “The Business and Strategy of Seniors
Housing & Care," Baltimore, MD
March 2009:
- 3 4Q08 NIC MAP Subscriber Webcast
- 11-12 NIC Western Regional Symposium, Hilton, San Diego, CA
- 24 Executive Circle Conference Call, 11:00 a.m. EST
- 24-27 Erickson School - “Sales and Marketing of Seniors Housing & Care," Baltimore, MD
- 29-31 2009 Environments for Aging Conference - Boston Copley Marriot, Boston, MA
Click here to suggest adding an event to this calendar.
(denotes NIC Events) |
|
|
If you are interested in
advertising in the
NIC Insider Newsletter,
please contact
Gary Infante at
webmaster@nic.org.
|
|
