The NIC MAP^® Data Service, powered by NIC MAP Vision, recently released national monthly data through June 2021 for actual rates and leasing velocity. This report includes national data as well as data for Atlanta, Philadelphia, and Phoenix. 

A few of the key takeaways from the 2Q2021 NIC MAP^® Seniors Housing Actual Rates Report are listed below. These key takeaways are based on data included in the Segment Type report. Care segments refer to the levels of care and services provided to a resident living in an assisted living, memory care or independent living unit. Full access to the reports and other takeaways is available to NIC MAP Data Service clients.  

• For all three care segments (independent living, assisted living, and memory care) move-ins outpaced move-outs for four consecutive months from March 2021 through June 2021, showing continued improvement.
  • Move-ins for the independent living and assisted living care segments reached their recorded highs in the time series in June 2021. Independent living reached 2.8% of inventory and assisted living reached 3.8% of inventory.
  • Move-ins for the memory care segments were also high in 2Q2021 at 4.4% of inventory in June 2021, down from the recorded high of 4.7% of inventory in March of 2021.
• Move-outs slowed in 2Q2021. For the independent living segment, move-outs were at 1.9% of inventory in June 2021. The last time move-outs for independent living were as low as 1.9% was in January 2020. Move-outs for assisted living segments reached the recorded low in the time series of 2.8% in June 2021. Move-outs peaked at 3.7% in July 2020 during the pandemic. Move-outs for memory care segments were at 3.1% for both April and June of 2021, the lowest it has been since September 2018 when it was 3.1%. For memory care, move-outs peaked at 5.3% in July 2020.
• Average initial rates for residents moving into independent living, assisted living and memory care segments were below average asking rates, with monthly spreads largest for memory care.
  
  
  • The average discount in initial rates for memory care units was 8.6% ($564) in June 2021, up from 6.1% one year earlier in June 2020. This discount of 8.6% equates to 1.0 month on an annualized basis, whereas 6.1% equated to 0.7 month.

  • It should be noted that some operators are providing concessions to incentivize move-ins rather than discounts. Examples of concessions could include a free TV upon move-in or a kitchen upgrade. These types of concessions would not be captured in the discounts reported here.

The Actual Rates Data Initiative is driven by the need to continually increase transparency in the seniors housing sector and achieve greater parity to data that is available in other real estate asset types. Now more than ever, with impacts of the COVID-19 pandemic on the sector, having access to accurate data on the actual monthly rates that a seniors housing resident pays as compared to property level asking rates helps the sector achieve this goal.

About the Report

The NIC MAP Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,600 properties across the U.S. operated by 25 to 30 seniors housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

While these trends are certainly interesting aggregated across the states, actual rates data is even more useful at the metro level. NIC MAP Vision is continuing to work towards reporting more markets.

Interested in Participating?

The Actual Rates Data Initiative is an effort to expand seniors housing data and we are looking for operators who have five or more properties to participate. We have expertise in extracting data from industry leading software systems, such as Yardi, PointClickCare, Alis, and MatrixCare, and can facilitate the process for you.

Your organization benefits through:

• More informed benchmarking, strategic planning, and day-to-day business operations,
• Increased transparency, aligning with other commercial real estate assets in terms of data availability, and
• Enhanced investment and efficiency across the sector.

Learn more by visiting nic.org/actual-rates.

Interested in learning more about NIC MAP data? 

To learn more about NIC MAP data, powered by NIC MAP Vision, and about accessing the data featured in this article, schedule a meeting with a product expert today. 

Two of the nation’s most influential economic thinkers, Paul Krugman and Lawrence H. Summers, will face-off in person at this year’s NIC Fall Conference during a lively main stage debate. Both have strong, often differing opinions about the economy and the path forward. The discussion will be moderated by Angela Mago, president Key Commercial Bank & KeyBank Real Estate Capital.

Krugman is a Nobel Prize winning economist and professor emeritus of Princeton University’s Woodrow Wilson School. Summers is the former Secretary of the U.S. Treasury and president of Harvard University, and served in many U.S. executive branch administrations.

To provide context for the upcoming discussion, NICs chief economist, Beth Mace, recaps the big issues driving the economy, and topics likely to be addressed at the upcoming Fall Conference session.

Growth Outlook

As of the second quarter, real GDP in the U.S. had surpassed its pre-pandemic level, rising at a fast 6.5% annualized clip. That said, growth is likely to be much slower in the coming months as the vast pandemic-related fiscal stimulus starts to wane, pent-up demand begins to fade, and as the COVID-19 Delta variant takes its toll. It will be interesting to hear the broad views Krugman and Summers will have on the shape of the post-pandemic recovery.

Inflation

Since the recovery from the pandemic has begun, inflation has increased due to supply chain disruptions and reopening effects. The policy question has become whether this inflation growth is transitory or will become more permanently embedded in consumer and business expectations.

Labor Pains: Short or Longer Term?

Increasingly, we hear from employers of all industries, and importantly, seniors housing and nursing care are among these industries, that finding workers is a limiting factor to business expansion. Certainly, one part of the discussion on labor shortages is around what is causing so many low wage workers to stay out of the labor force now.

Interest Rates

Federal Reserve Chairman Jerome Powell recently said that interest rate hikes are not on the Fed’s radar immediately. But the markets may not agree with the pace and timing of expected interest rates increases. As the economy starts to improve, what should we expect to see with interest rates?

Send Us Your Questions

For more on the 2021 NIC Fall Conference opening session with Krugman and Summers, look for an interview with Paul Krugman in the September edition of the NIC Insider newsletter, coming September 9. As session moderator Angela Mago prepares for the discussion, she wants to know what topics industry stakeholders want to hear about. Send your questions now to submityourquestions@nic.org.

Learn more about the 2021 NIC Fall Conference and register here. 

The NIC Analytics team recently released the inaugural NIC Lending Trends report. The timely report provides first quarter 2021 data as well as nearly five years of data of senior housing and nursing care loan volumes and loan balances from a range of debt providers.

The new quarterly report currently tracks over $85 billion in senior housing and care loans including construction loans, mini-perm/bridge loans, and permanent loans. It includes delinquency rates, same-store growth metrics and indexed volumes.

NIC Analytics has been collecting data for more than five years with the goal of further enhancing transparency of capital market trends in the senior housing and care sector. These data are not to be interpreted as a census of all senior housing and skilled nursing lending activity in the U.S. but rather reflect lending activity from participants included in the survey sample only.

Highlights of the 1Q2021 report can be found below, with the full report available for download on nic.org. The next quarterly NIC Lending Trends Report, including second quarter 2021 data, is scheduled for release in early November.

Takeaways from 1Q21 NIC Lending Trends Report

• The issuance of closed new construction loans remained relatively weak for senior housing in 1Q2021 and was at its lowest level since the data series has been reported starting in mid-2016. Growth was negative for the fourth consecutive quarter on a same-store quarter-over-quarter basis. Lenders’ interest in many development projects was put on hold due to uncertainties associated with the pandemic. Anecdotally, and since the introduction and widespread use of vaccinations at the end of 2020, lender interest in the sector has improved and data in future quarters may prove this out. For nursing care, the volume of new construction loans closed saw an increase in 1Q2021 from 4Q2020 but remains at very low levels and is in line with historic patterns.

Source: NIC Lending Trends Report, NIC Analytics

• Volume of new mini-perm/bridge loans closed was strong for nursing care in 1Q2021, reaching the second highest recorded volume in the time series. Lending has been increasing since the second quarter of 2020 and remained near its 4Q2020 peak. New mini-perm/bridge loans closed for senior housing were flat in 1Q2021 at relatively low levels compared with recent years.
• New permanent loan issuance for senior housing was weak in 1Q2021 and was at its lowest level in the recorded time series since mid-2016. New permanent loans for senior housing saw a drop of 45.6% on a same-store basis from 4Q2020. Nursing care permanent loan issuance was also weak and has been so for the past several quarters.

Quarterly updates to the NIC Lending Trends Report will be available on nic.org. 

Interested in participating? NIC very much appreciates our data contributors. This report would not be possible without them. If you would like to participate and contribute your data, please email us at analytics@nic.org. The information provided as part of the Lending Trends survey will be kept strictly confidential. Data acquired from this survey will only be reported in the aggregate, and therefore, the resulting aggregated data will not be attributed to you or your company upon distribution. As a thank you for providing data, data contributors receive the Lending Trends report in advance of public publication.

What’s ahead for senior housing and care?

Randy Bufford has some thoughts on the topic. As Founder and Chairman of Trilogy Health Services, Bufford is one of the thought leaders attending the 2021 NIC Fall Conference in Houston. The Conference is NIC’s first in-person convening of leaders in senior housing and care since the pandemic began.

NIC recently talked to Bufford in advance of the event to get his take on the industry’s outlook. Many industry leaders plan to attend the Conference to share ideas with others experiencing the same challenges, while also building the relationships that will help them succeed in the future.

Bufford identified five senior living trends to watch:

1. Labor shortage. “This is the most difficult labor market I’ve ever seen in my 39 years in the industry,” said Bufford. “We need to invest in people.” Trilogy’s approach is to put employees first. “Great staffing leads to great customer service,” he added. Bufford’s advice: Focus on retention. For Trilogy, that means a holistic approach including training programs and apprenticeships to create a career path, a servant leader culture that demonstrates that the company cares about them, and frequent, strategic wage increases. Trilogy, which has 124 communities, raises employee wages gradually, every quarter. Bufford calls it the company’s quarterly wage investment, a program to boost the pay of the lowest paid workers. Caregiver positions today pay $15 an hour and up. “Make those investments wisely and the industry should be able to solve these staffing challenges,” he said.

                       “We need to invest in people.”

2. Private units. As one of the largest builders of new skilled nursing facilities in the country, Trilogy has switched its prototype design to all private rooms. The pandemic only highlighted the need for greater infection control which is easier to achieve with private rooms. “Dual occupancy units in skilled nursing should be changed,” he said.
3. Advances in technology. Telehealth is likely here to stay. Remote visits got a big boost when Medicare expanded coverage of telehealth services during the pandemic. Many expect the coverage to continue when the health emergency ends—a net plus for the industry. Also, monitoring devices will continue to be refined to help improve resident health and reduce labor costs.
4. Innovative infection controls. The pandemic highlighted the need for new approaches. Trilogy launched The SHIELD program, as a comprehensive view of infection control, applying the latest disinfection and cleaning tools. The communities are also equipped with a UV light system that destroys 99.99% of surface and airborne pathogens. Trilogy continues to experiment with special ventilation and filtration products to determine whether they can help limit the spread of viruses. “We’ve learned a lot of tough lessons during the pandemic, but they’re good lessons,” said Bufford.
5. The intersection of demography and affordability. Overall, Bufford is bullish on the industry as the number of seniors who need help continues to grow. But the rising older population, especially among those seeking an affordable housing option, is colliding with the labor shortage. Bufford sees a possible solution by engaging families in caregiving since they already provide a lot of care services at home. The idea would be to move those relationships to a senior living community where the family would help provide care in return for a reduced cost of services. “The operators that win will be those that innovate in their approach to find ways to provide better care, more efficiently,” predicted Bufford.

According to the most recent CMS data compiled by NIC’s Skilled Nursing COVID-19 Tracker, 4.8% of skilled nursing facilities (SNFs) reported newly confirmed cases among residents for the week ending August 1, 2021. Half of these facilities had a vaccination rate among staff below 49%, which is 12 percentage points below the national average rate of staff fully vaccinated (60.7%) according to NIC’s Skilled Nursing Covid-19 Tracker. As has been reported elsewhere, the pandemic is likely not over for the unvaccinated. Unfortunately, this includes skilled nursing facilities with low vaccination rates among staff and residents according to analysis by NIC.

With the Delta variant changing the narrative once again by fueling the resurgence in COVID-19 cases in the U.S. and pushing parts of the country with low vaccination coverage into a new wave of the COVID-19 pandemic, the per-resident rate of new COVID-19 infections within SNFs rose to 0.18%, meaning that 18 in 10,000 residents tested positive on August 1. This is equivalent to six times the rate reported on June 20 (0.03% – 3 in 10,000 residents tested positive) but is also well below the peak of 3.06% (306 in 10,000 residents tested positive) reached in December of 2020. Moreover and notably, overall case counts within SNFs relative to cases among the general population remained low compared with the high share of cases seen in SNFS in the fall of 2020 wave prior to the vaccine rollout.

Regionally, the highest per-resident rate of new COVID-19 infections was seen in the South at 0.34% (the highest rate in six months), followed by the Midwest (0.11% – doubled in the last three weeks), the West (0.10% – relatively flat), and the Northeast (0.06% – doubled from the prior week ending July 25).

For the week ending August 1, the South region alone accounted for about 68% of newly confirmed cases within all U.S. skilled nursing facilities. In the span of six weeks, virus cases among SNFs residents in the South region went from 97 cases on June 20 to 1,340 cases on August 1, up 1,281%. This is partly due to increasing Delta variant cases among the general population in the South (up 888% between the weeks ending June 20^th and August 1^st), specifically in Texas and Florida.

Low vaccination rates among SNFs staff in some parts of the country are also contributing to recent increases. Overall, 82.5% of SNFs residents are fully vaccinated vs. 60.7% of staff. While these rates have been gradually ticking up week-over-week, there are still many skilled nursing facilities with low vaccination rates among both residents and staff.

Exhibit 1 below depicts vaccination stats and infection rates by region. Notably, the South region had the lowest rate of residents and staff fully vaccinated against COVID-19 at 79.2% and 54.4%, respectively. At 54.4%, the South region vaccination rates among staff remained far below the national average (60.7%). On the other hand, SNFs in the West and Northeast regions had above national average rates of staff fully vaccinated at 72.0% and 67.8%, respectively.

Exhibit 1: Skilled Nursing Facilities – Per-Resident Rate of New COVID-19 Infections

Looking closely at states in the South region with low vaccination rates and increasing virus cases, Florida newly reported cases among the general population reached record highs on August 1. In six weeks, weekly cases in Florida jumped over 1000%, from nearly 11,000 on June 20 to over 120,000 cases on August 1 and continued to climb through the week ending August 8, according to CDC data compiled by NIC’s Skilled Nursing COVID-19 Tracker. Prior to the outbreak of the Delta variant, the high point for Florida was about 110,000 cases for the week ending January 10, 2021.

The worrisome spike in virus cases among the general population in Florida and the low vaccination rates within skilled nursing facilities there (72.9% of residents fully vaccinated vs. 47.1% of staff) pushed weekly cases among SNFs residents back up from 39 on June 20 to 556 on August 1, up 1326%.

Similarly, weekly cases among the general population in Texas increased by about 640%, from over 8,300 on June 20 to nearly 62,000 new cases on August 1, and weekly confirmed cases among SNFs residents increased at a faster pace over the same period, from 15 cases on June 20 to 235 cases on August 1 (a very large percentage increase of 1467% due to the low starting point). Again, skilled nursing facilities in Texas have one of the lowest rates of their residents and staff fully vaccinated against COVID-19 at 78.6% and 56.8%, respectively.

Vaccination rates among SNFs staff in Florida and Texas remained below national average rate of staff fully vaccinated (60.7%). These two states accounted for 40% of overall weekly cases within U.S. SNFs on August 1^st.

Conversely, California continued to report a relatively low number of cases among residents weekly (59 cases on August 1). In fact, California is one of the very few states with a vaccination rate among staff and residents above 80%. (Hawaii and Puerto Rico are the other parts of the country with 80%+ vaccination rate among staff and residents). Visit nic.org/snf-covid-tracker for SNFs vaccination rates by state.

October 11-20, 2021

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Weekly COVID-19 cases among the U.S. general population vs. skilled nursing residents

Overall case counts within SNFs relative to cases among the general population remained low and are nowhere near levels seen in the fall of 2020 wave prior to the vaccine rollout. The notable difference in virus cases among the general population and SNFs residents between the fall 2020 variant wave and the ongoing surge of the Delta variant suggests that facilities with low vaccination rates are likely driving SNFs COVID case rise.

Exhibit 2 below shows normalized trends of weekly COVID-19 cases among the general population and SNFs residents reaching a six-month high with over 600,000 cases and nearly 2,000 cases reported for the week ending August 1, respectively. Newly confirmed cases among residents on August 1 accounted for one-third of 1% of overall weekly cases in the U.S., and the share of SNFs reporting newly confirmed cases among residents stood at 4.7%.

 In early November 2020, when weekly COVID-19 case counts among the general population were about the same level as August 1, 2021 (about 600,000 cases), weekly cases among SNFs residents were about seven times cases reported on August 1, equivalent to 14,216 cases and accounting for 2.4% of overall weekly cases in the U.S. Additionally, the share of SNFs reporting newly confirmed cases among residents was about 17% on November 1, 2020.

On August 1, the normalized trend of the weekly COVID-19 cases among the general population broke through the weekly average line of 550,000 cases (average computed over the period from June 6, 2020, to August 1, 2021), while the normalized count of virus cases within skilled nursing facilities remained far below the weekly average of 9,000 cases.

Exhibit 2: Weekly COVID-19 Cases – Normalized Count | U.S. vs. SNFs

Although there have been reports of COVID-19 breakthrough cases across the U.S. and skilled nursing facilities, data corroborates vaccine effectiveness against the Delta variant. Recent studies have shown that overall effectiveness may be declining against infections but remains very strong against hospitalization and fatalities from the Delta variant. To say the least, vaccines are helping to avoid another “deadly” wave of the COVID-19 pandemic.

This upward trend in Delta variant infections is concerning and will likely persist in the coming weeks until an extremely high vaccination rate is reached. That said, U.S. vaccination rates have recently accelerated, and the U.S. will begin to offer coronavirus booster shots to raise antibody levels among at-risk adults on September 20, including residents of skilled nursing facilities and seniors housing properties.

Separately, vaccine effectiveness is also reflected in the wide dispersion in occupancy between facilities, which is somewhat tied to virus spread among residents and staff. Additionally, NIC’s Executive Survey Insights (Wave 31: July 12 to August 8, 2021) shows occupancy improvements and acceleration in the pace of move-ins. “Despite the rise in circulation of the Delta variant of the COVID-19 virus, resident demand remains the driving force behind acceleration in the pace of move-ins. Between roughly 55% and 60% of organizations report that the pace of move-ins accelerated in the past 30-days, and similar proportions report a corresponding increase in occupancy” wrote Lana Peck, Senior Principal at NIC.