News & Press Releases
Seniors Housing Occupancy Continues Recovery, Reaching 89.1%
FOR IMMEDIATE RELEASE: Friday, January 11, 2013
Contact: Biba Aidoo, (410) 267-0504 or baidoo@nic.org
SENIORS HOUSING OCCUPANCY CONTINUES RECOVERY, REACHING 89.1%
NIC MAP® Data Shows Strong Absorption, Continued Rent Growth, and Slower Construction Activity
ANNAPOLIS, Md. – The seniors housing occupancy rate continued its recovery in the fourth quarter of 2012, while the pace of annual rent growth remained unchanged and overall construction activity declined, 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 fourth quarter of 2012 was 89.1%, an increase of 0.3 percentage points from the prior quarter and a 1.0 percentage point increase from a year earlier. The seniors housing average occupancy rate has risen consistently during the past 11 quarters and is 2.1 percentage points above its cyclical low of 87.0% in the first quarter of 2010.
The occupancy rate for independent living properties and assisted living properties averaged 89.0% and 89.1%, respectively, in the fourth quarter of 2012. Both independent living and assisted living occupancies showed improvement over the prior quarter, rising 0.3 and 0.2 percentage points, respectively. The occupancy rate for independent living is now 2.2 percentage points above its cyclical low, while the occupancy of assisted living is 2.0 percentage points above its respective cyclical low. “Occupancy is now at a four-year high and, with inventory growth remaining tempered, seniors housing occupancy will likely continue to recover in the near-term,” says Mike Hargrave, vice president – NIC MAP.
During the fourth quarter of 2012, annual asking rent growth for seniors housing remained unchanged at 2.2% from the third quarter of 2012, and was 0.6 percentage points above the pace from the fourth quarter of 2011. “While annual rent growth did not accelerate this quarter, it continues to outperform core inflation, which has been slowing in recent months,” says Chuck Harry, NIC’s managing director and director of research and analytics.
Seniors housing annual absorption was 2.3% during the fourth quarter of 2012, compared to 2.2% during the third quarter of 2012 and 2.0% during the fourth quarter of 2011. “This is now the ninth consecutive quarter during which the pace of annual absorption is above that of annual inventory growth, which has resulted in the continued steady recovery in seniors housing occupancy during the past couple of years,” says Harry.
In the fourth quarter of 2012, the seniors housing annual inventory growth rate was 1.2%, compared to 1.3% in the third quarter of 2012 and 1.3% a year earlier. Currentconstruction as a share of existing inventory for seniors housing was 2.0%, which is 0.2 percentage points below that of the previous quarter. “While there continues to be discussion of the industry entering a new development cycle, we continue to see relatively modest levels of construction starts. This implies, at least over the next four quarters, that near-term inventory growth will remain tempered,” says Harry.
The nursing care occupancy rate was 88.1% in the fourth quarter of 2012, which is an increase of 0.1 percentage points from the third quarter of 2012.
Nursing care annual inventory growth was -0.4% in the fourth quarter of 2012, continuing the established trend of slightly declining inventory growth. Private pay rents for the sector grew 2.9% year-over-year this quarter, which is unchanged from the pace reported in the third 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.