News & Press Releases
Seniors Housing Occupancy Receives Seasonal Lift as Demand Exceeds Inventory Growth
Construction Activity Posts New High for the Market Cycle
FOR IMMEDIATE RELEASE: Wednesday, October 7, 2015
Contact: Biba Aidoo, (410) 267-0504 or firstname.lastname@example.org
ANNAPOLIS, Md. – Overall, as the sector’s net absorption of units outpaced the additions to its inventory during the quarter, the average occupancy rate for seniors housing properties in the third quarter of 2015 was 89.9%, an increase of 0.2 percentage point from the prior quarter. As of the third quarter of 2015, occupancy was 3.0 percentage points above its cyclical low of 86.9% during the first quarter of 2010.
The occupancy rate for independent living properties and assisted living properties averaged 91.1% and 88.3%, respectively, during the third quarter of 2015. When compared to the prior quarter, independent living’s occupancy increased by 0.1 percentage point and assisted living’s occupancy increased by 0.3 percentage point. Occupancy for independent living was still 0.2 percentage point above year-ago levels, compared to assisted living, which is down 0.8 percentage point from the third quarter of 2014.
During the third quarter of 2015, the rate of seniors housing’s annual asking rent growth was 2.4%, 0.1 percentage point above the prior quarter’s pace and unchanged from its pace one year earlier during the third quarter of 2014.
Seniors housing annual absorption was 1.8% as of the third quarter of 2015, compared to 2.0% during the second quarter of 2015 and 2.9% during the third quarter of 2014. The rate of annual absorption has been decelerating during the past four quarters and is now at its slowest rate since 2011.
In the third quarter of 2015, the seniors housing annual inventory growth rate was 2.1%, unchanged from the prior quarter. Current construction as a share of existing inventory for seniors housing accelerated 0.2 percentage point to 4.9% as of the third quarter of 2015, which represents a new cyclical high.
“The improvement in occupancy followed two quarters of declines despite the volatility in the stock market and uncertainty about the Federal Reserve increasing interest rates, which appear to have affected overall consumer confidence levels,” said Beth Burnham Mace, chief economist for NIC. She noted, however, that “we often see a pickup in occupancy in the summer months as families move loved ones into seniors housing.”
Chuck Harry, NIC’s managing director and director of research and analytics, noted that on a longer-term basis, “the growing level of units under construction registered again in the third quarter reflects that seniors housing is in the growth phase of its real estate cycle. In fact, during the four quarters ending with the third quarter 2015, the number of new seniors housing units added to inventory exceeded the number of units absorbed on a net basis, resulting in the occupancy rate having been pushed down by 30 basis points from the year-earlier levels.”
The nursing care occupancy rate decreased 0.3 percentage point to 87.6% during the third quarter of 2015.
Nursing care annual inventory growth was down 0.4% in the third quarter of 2015, while annual absorption was down 1.1%. Private pay rents for the sector grew 2.5% year over year this quarter, which was essentially unchanged from the pace of the prior quarter.
The National Investment Center for Seniors Housing & Care (NIC) is a 501(c)(3) organization whose mission is to advance the quality and availability of seniors housing and care options for America’s elders. NIC provides research, education, and increased transparency that facilitate leadership development, quality outcomes, and informed investment decisions with respect to seniors housing and care.
Since 1991, NIC has been the leading source of research, data and analytics for owners, operators, developers, capital providers, researchers, academics, public policy analysts and others interested in meeting the housing and care needs of America’s seniors. NIC has proudly sponsored the Seniors Housing & Care Journal, a peer reviewed journal for applied research in the seniors housing and care field, since 1993. One of NIC’s major initiatives to further its mission is the NIC MAP® Data Service (NIC MAP). NIC MAP is a web-based suite of research and analysis tools that tracks and reports seniors housing and care data, enabling users to gain access to more than 13,000 properties within 99 U.S. metropolitan markets. Established in 2004, NIC MAP creates transparency for seniors housing and care by offering accurate, unbiased and actionable market-level data on all of the sector’s property types and care segments including independent living (IL), assisted living (AL), memory care, and nursing care, as well as, continued care retirement communities (CCRCs). Our data is updated quarterly, monthly and weekly, and is inclusive of property-level inventory by unit type, sales transactions, properties under construction and in the planning phase, aggregated occupancy and rent comparables, demographics and much more. For more information, visit www.nic.org or call 410-267-0504.