News & Press Releases

Overall Occupancy Rate and Average Rents Flat For Seniors Housing Sector

Press Room – 2011 NIC Press Releases

Overall Occupancy Rate and Average Rents Flat For Seniors Housing
Fourth Quarter Data from NIC MAP Highlights Slowing Pace of Rent Growth

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

Annapolis, Md. – The overall occupancy rate for seniors housing remained unchanged in the fourth quarter of 2010, and average rent growth was flat during the past year, according to information released today by NIC MAP, a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC). The data also shows absorption is on the rise, up from its lows two years ago, while construction activity experienced a slight decline.

The average occupancy rate for seniors housing properties in 4Q10 was 87.6%, which was unchanged from 3Q10 – as well as one year ago – showing that the fundamentals have leveled off and providing further evidence that occupancy has stabilized, according to Michael Hargrave, vice president, NIC MAP. Beginning in early 2007, occupancy had been in a steady state of decline through the second quarter of 2009; since then, occupancy has been relatively level – between 87.3% and 87.9% – for the past seven quarters, he said.

Year-over-year rent growth for seniors housing slowed materially in the fourth quarter of 2010 to 0.0%, as compared to 0.6% last quarter, according to the data. One year ago, the rent growth figure was 1.8%, two years ago it was 2.9% and three years ago it was 3.8%.

“It’s clear that occupancy rates have established a pattern of trending sideways over this past year, while the pace of YOY rent growth continues to slow. It’s also reasonable, however, to expect these trends given the current economic environment,” Hargrave said.

More properties reported to NIC MAP that they lowered their rents compared to a year ago, as the percentage reporting negative year-over-year rent growth rose to 20.4 percent during the fourth quarter, up from 17.9 percent the previous quarter, which is contributing to the slowing of the year-over-year rent growth.

In a healthy sign for seniors housing properties, the annual pace of absorption was 1.4% in the fourth quarter of 2010, consistent with the previous quarter, and higher than a year ago (0.8% in 4Q09). Absorption continues to recover from its lows in 2008 and 2009, when it had essentially disappeared for a period.

The pace of annual inventory growth for seniors housing during the fourth quarter slowed to 1.5%, representing the lowest level of annual inventory growth on record since NIC MAP began tracking inventory. Annual inventory growth slowed from 1.8% the previous quarter, while a year ago the pace of annual inventory growth was 2.3%. Historically, the seniors housing inventory over the past five years had been growing at an average annual rate of 2.1%.

Construction activity for seniors housing slowed slightly in 4Q10 to 1.8% of existing inventory, down from 2.0% the previous quarter and 2.3% one year ago. “In the previous three quarters, the construction inventory pipeline was level at around 2.0% to 2.2%, while in the fourth quarter it slowed to 1.8%, reflecting a marginal slowing of construction activity which we’re witnessing in the sector right now,” Hargrave said.

Reflecting a trend of marginal decline over the past few years, the nursing care occupancy rate was 88.3% in 4Q10, down just 0.2 percentage points from 3Q10 and down a half percentage point from a year ago, when the occupancy rate was 88.8% in 4Q09.

Nursing care private pay rents grew 3.1% for the quarter, reflecting continued growth. Inventory growth showed a slight negative decline on an annual basis of 0.2% in 4Q10, and annual absorption declined 0.7%. For the past five years, the nursing home inventory has been shrinking at an annual rate of 0.3%, according to NIC MAP data.

NIC MAP Seniors Housing & Care Key Metrics for 4Q10
Seniors Housing Nursing Care
4Q10 3Q10 4Q10 3Q10
Occupancy 87.6% 87.6% 88.3% 88.5%
Annual Rent Growth 0.0% 0.6% 3.1% 3.2%
Annual Absorption 1.4% 1.4% -0.7% -0.8%
Annual Inventory Change 1.5% 1.8% -0.2% -0.2%
Construction vs. Inventory 1.8% 2.0% 0.4% 0.6%
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 more than 12,000 properties on a quarterly basis in the 100 largest metropolitan markets. 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.

February 15th 2024 NIC Insider Newsletter Now Available Read Now »