News & Press Releases
Seniors Housing Occupancy Continues Recovery
FOR IMMEDIATE RELEASE: Tuesday, April 17, 2012
Contact: Jessica Palmeri (410) 267-0504 or jpalmeri@nic.org
Annapolis, Md. – The seniors housing occupancy rate continued its modest recovery in the first quarter of 2012, while construction activity and year-over-year rent growth slowed, according to NIC MAP, a data analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC).
Overall, the average occupancy rate for seniors housing properties in 1Q12 was 88.4%, an increase of 0.2 percentage points from the prior quarter and a 0.8 percentage point increase from a year earlier. The seniors housing average occupancy rate has risen consistently during the past eight quarters and is 1.3 percentage points above its cyclical low of 87.1% in 1Q10.
The occupancy rate for independent living properties in 1Q12 averaged 88.3%, and the occupancy rate for assisted living properties averaged 88.6%. Both independent living and assisted living showed improvement over the prior quarter, rising 0.3 and 0.2 percentage points, respectively. The average occupancy rate for independent living is now 1.5 percentage points above its cyclical low, while occupancy in assisted living is 1.3 percentage points above its respective cyclical low. “With occupancy continuing to rise, it appears the pace of the recovery remains slow but steady,” says Michael Hargrave, vice president – NIC MAP.
Annual rent growth for seniors housing slowed to 1.2%, from 1.6% in 4Q11 and is unchanged from the pace in the first quarter of 2011. “The slowdown in the pace of annual rent growth speaks to the challenges that a number of operators have been experiencing in achieving rental rate increases,” says Chuck Harry, NIC’s director of research and analysis.
For seniors housing properties, annual absorption was 2.1% in the first quarter of 2012, compared to 2.0% in 4Q11 and 1.9% a year earlier. “This is now the sixth consecutive quarter where the pace of annual absorption is above that of annual inventory growth, which is encouraging for continued increases in occupancy,” says Harry.
In 1Q12, the seniors housing annual inventory growth rate was 1.2%, which is unchanged from 4Q11 and a year earlier. Current construction as a share of existing inventory for seniors housing was 1.5%, which is down from 1.8% in the previous quarter.
The nursing care occupancy rate was 88.2% in 1Q12, which is unchanged from 4Q11. While nursing care occupancy was essentially flat this quarter, it has been marginally declining for several years.
Nursing care annual inventory growth was -0.3% in 1Q12, continuing the established trend of slightly declining inventory growth. Private pay rents for the sector grew 3.0% year-over-year this quarter, which is slower than the 3.4% pace reported in the fourth quarter of 2011.
About NIC
For more than 20 years, the National Investment Center for the Seniors Housing & Care Industry (NIC) has been committed to advancing the quality of seniors housing and care by facilitating informed investment decisions for investors, lenders, owners, operators and developers through groundbreaking research, actionable data and dealmaking events. 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 12,500 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 www.NIC.org or call (410) 267-0504.