Assisted Living Occupancy Rises, Seniors Housing Rent Growth Slows

August 12, 2010

Press Release

Press Room – 2010 NIC Press Releases


NIC MAP Data Also Shows Increased Construction Starts

Contact: Renee Tilton, (410) 626-0805 or

Annapolis, Md. – Occupancy rates fell for independent living and rose for assisted living in the second quarter of 2010, while the pace of rent growth slowed markedly, according to NIC MAP, a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC). The data also showed the first rise in trailing-twelve month (TTM) construction starts since the first quarter of 2009 for seniors housing (both independent and assisted living properties) due to construction beginning on several entrance fee CCRCs.

The average occupancy rate for assisted living properties in 2Q10 was 88.3%, up from 87.8% in 1Q10 and a year ago, in 2Q09. Conversely, occupancy rates fell to 87.4% for independent living properties during the second quarter of 2010, down from 87.5% in 1Q10 and 88.0% a year ago. “Although the occupancy rate for independent living is still declining, there are some signs that it may be at or nearing its cyclical bottom,” said Michael Hargrave, vice president – NIC MAP. “For example, during the last year the independent living occupancy rate is down 0.6 percentage points, compared to the previous four quarters when it was averaging a decline of 1.85 percentage points.”

The skilled nursing occupancy rate was 88.6% in 2Q10, down from 88.9% in 1Q10 and 89.2% in 2Q09. “Skilled nursing trends continue to show both declining absorption and declining inventory growth,” said Hargrave.

One of the key drivers of the recent stabilization in occupancy rates appears to be a return to positive absorption. Annual absorption, which was 0.0% in 2Q09, now stands at 1.7% in 2Q10 for seniors housing properties.

Rent growth for seniors housing in the second quarter of 2010 was still positive, although it slowed markedly compared to previous quarters. The average monthly rent (AMR) per unit was $2,705 for independent living and $3,525 for assisted living. For both types of properties, the year over year rent growth was 0.7%. In comparison, the year over year rent growth in the first quarter of 2010 was 1.6% for independent living and 1.4% for assisted living.

“This reflects an increase in the percentage of operators who are telling us that they are adjusting their market rents,” said Hargrave. “In the second quarter of 2009, the percentage of properties that reported a decline in year over year rents was 9.1%. Now, a year later, that number is 15.7%.”

In contrast, there was no slowdown in the growth rate for private pay AMR for skilled nursing in 2Q10. For the second quarter of 2010, the AMR for skilled nursing was $7,979, compared to $7,734 in 2Q09.

For independent living, TTM construction activity was 1.1% of existing inventory in 2Q10, compared to 0.9% in 1Q10 and 1.0% a year ago. TTM construction activity was also 1.1% in 2Q10 for assisted living, compared to 0.9% in 1Q10 and 1.3% in 2Q09.

“This quarter we saw an increase in the level of construction starts for seniors housing,” said Hargrave. “The 1,659 seniors housing units that were started in the second quarter of 2010 represent a 52% increase over the average number of starts per quarter during the previous four quarters. However, a majority (56%) of the starts are due to several not-for-profit tax exempt bond financings which had been delayed by the frozen credit market for tax exempt bond financing.”

For skilled nursing, TTM construction activity was 0.3% in 2Q10, which was the same as the previous quarter and a year ago in 2Q09.

NIC MAP Seniors Housing & Care Key Metrics for 2Q10
Independent Living Assisted Living Nursing Care
2Q10 2Q09 2Q10 2Q09 2Q10 2Q09
Occupancy Rate¹ 87.4% 88.0% 88.3% 87.8% 88.6% 89.2%
Average Monthly Rent per Unit² $2,705 $2,686 $3,525 $3,502 $7,979 $7,734
TTM Construction Starts
vs. Current Inventory³
1.1% 1.0% 1.1% 1.3% 0.3% 0.3%
  1. The occupancy rate is the percent of units/beds in all properties which are occupied.
  2. Average monthly rent per unit includes base rates and monthly care fees and is private pay only; it does not include ancillary service and move-in fees, and does not factor in the impact of concessions.
  3. TTM construction starts vs. current inventory is the trailing-twelve month sum of units/beds that started construction divided by the inventory in the last quarter.

Source: NIC MAP® Data & Analysis Service

About NIC

Founded in 1991, the National Investment Center for the Seniors Housing & Care Industry is a nonprofit education and research organization providing information about business strategy and capital formation for the senior living industry. NIC is the leading provider of historical and trend data on the industry through its NIC MAP® Data and Analysis Service that tracks properties in the 100 largest metropolitan areas and its Key Financial Indicators™ (KFIs) that report nationwide statistics. Proceeds from its annual conference and other events are used to fund data and research on issues of importance to lenders, investors, developers, operators, and others interested in meeting the housing and care needs of America’s seniors. For more information, visit or call (410) 267-0504.