News & Press Releases
Seniors Housing Occupancy Remains Unchanged at 89.1%
FOR IMMEDIATE RELEASE: Friday, April 12, 2013
Contact: Biba Aidoo, (410) 267-0504 or baidoo@nic.org
SENIORS HOUSING OCCUPANCY REMAINS UNCHANGED AT 89.1%
NIC MAP® Data Shows Slower Absorption, Continued Rent Growth, and Increased Construction Activity
ANNAPOLIS, Md. – The seniors housing occupancy rate remained essentially flat during the first quarter of 2013, while the pace of annual rent growth accelerated slightly and overall construction activity rose, according to NIC MAP®, a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC).
Overall, the average occupancy rate for seniors housing properties in the first quarter of 2013 was 89.1%, unchanged from the prior quarter and a 0.8 percentage point increase from a year earlier. The first quarter of 2013 marked the first time since the second quarter of 2010 that the seniors housing average occupancy rate failed to rise. While the recovery in occupancy stalled, it remains 2.2 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 89.3% and 88.8%, respectively, during the first quarter of 2013. Compared to the prior quarter, independent living occupancy rose by 0.2 percentage points, while assisted living occupancy declined by 0.2 percentage points. The occupancy rate for independent living is now 2.5 percentage points above its cyclical low, while the occupancy of assisted living is 1.9 percentage points above its respective cyclical low. “We had been seeing independent and assisted living occupancies moving in tandem during the past year. Going forward, we may begin to see a divergence, as inventory growth headwinds have been developing for assisted living, while construction in independent living remains comparatively tempered,” says Mike Hargrave, NIC’s chief market & data strategist.
During the first quarter of 2013, seniors housing’s annual asking rent growth accelerated to 2.3%, and was 0.9 percentage points above its pace one year earlier during the first quarter of 2012. “While seniors housing rent growth overall accelerated, its acceleration was driven by assisted living properties. Annual rent growth in assisted living properties accelerated 40 basis points, while the pace of annual rent growth in independent living properties remained essentially flat,” says Chuck Harry, NIC’s managing director and director of research and analytics.
Seniors housing annual absorption was 2.1% as of the first quarter of 2013, compared to 2.3% during the fourth quarter of 2012 and 2.2% during the first quarter of 2012. “While the pace of annual absorption continues to outpace that of annual inventory growth, the delta compressed this quarter as absorption slowed. Based on the construction pipeline, inventory growth will likely begin to accelerate modestly in the near-term, which may cause the delta to compress yet further,” says Harry.
In the first quarter of 2013, the seniors housing annual inventory growth rate was 1.2%, which is near where it has oscillated since the fourth quarter of 2011. Currentconstruction as a share of existing inventory for seniors housing was 2.5%, which is 0.2 percentage points above that of the previous quarter.
The nursing care occupancy rate was 88.0% in the first quarter of 2013, which is a decrease of 0.1 percentage points from the fourth quarter of 2012.
Nursing care annual inventory growth was -0.2% in the first quarter of 2013, continuing the established trend of slightly declining inventory growth. Private pay rents for the sector grew 2.8% year-over-year this quarter, which is unchanged from the pace reported in the fourth quarter of 2012.
About NIC
The National Investment Center for the Seniors Housing & Care Industry (NIC) is a 501(c)(3) organization whose mission is to facilitate informed investment in the seniors housing and care industry. NIC’s NIC MAP® Data and Analysis Service tracks more than 12,600 properties on a quarterly basis in the 100 largest metropolitan markets. Proceeds from its national conference and other events are used to fund data and research on issues of importance to lenders, investors, providers, developers, and others interested in meeting the housing and care needs of America’s seniors. For more information, visit www.NIC.org or call (410) 267-0504.