News & Press Releases
Seniors Housing Occupancy Declines in First Quarter Due to Weak Absorption and Moderate Increase in Inventory
Rent Growth Accelerates For Majority Independent Living Properties
FOR IMMEDIATE RELEASE: Thursday, April 9, 2015
Contact: Biba Aidoo, (410) 267-0504 or email@example.com
ANNAPOLIS, Md. – Overall, the average occupancy rate for seniors housing properties in the first quarter of 2015 was 90.2%, a decrease of 0.2 percentage points from the prior quarter. As of the first quarter of 2015, occupancy was 3.3 percentage points above its cyclical low of 86.9% during the first quarter of 2010.
Data for the first quarter showed stable occupancy levels for majority independent living properties at 91.2%, the same as in the fourth quarter of 2014, which was the best showing since late 2007 and 1.0 percentage points above year-earlier levels. Rent growth accelerated to 2.7%, the fastest rate since late 2009.
Chuck Harry, NIC’s Managing Director and Director of Research commented that “majority independent living properties have benefited from relatively moderate levels of new units being delivered into the market. Strong occupancy levels have started to put upward pressure on rent growth”.
Occupancy rates for majority assisted living properties slipped back to 88.7% in the first quarter of 2015, down 60 basis points from 89.3% in the fourth quarter and 20 basis points from 88.9% in the first quarter of 2014. The decline reflected moderate levels of deliveries and weak absorption, a measure of demand and defined as the change in occupied units.
“The absorption numbers were a surprise juxtaposed to generally favorable economic trends and were a contrast to recent trends where absorption had been very strong”, said Beth Burnham Mace, NIC’s chief economist. “The first quarter numbers are difficult to fully explain”, said Mace, “and may be an aberration. We look forward to seeing the second quarter figures to see the extent to which first quarter numbers were related to seasonal patterns or the effects of the flu season on residents. The sector’s first quarter numbers are often relatively weak.”
Harry added that “whereas the levels of new supply in select markets has generally been more of a concern for assisted living up until this point, the first quarter drop in occupancy for majority assisted living was due less to supply pressures than to the soft demand.”
For the broader seniors housing sector, rate of seniors housing’s annual asking rent growth increased to 2.4% during the first quarter of 2015, an increase of 0.1 percentage points from the prior quarter and 0.6 percentage points above its year-earlier pace.
Seniors housing annual absorption decelerated to 2.4% as of the first quarter of 2015, compared to 2.7% during the fourth quarter of 2014 and 2.3% during the first quarter of 2014.
In the fourth quarter of 2014, the seniors housing annual inventory growth rate inched up to 1.8% from 1.7% during the prior quarter. Current construction as a share of existing inventory for seniors housing was 3.9%, which was unchanged from the prior quarter.
The nursing care occupancy rate increased 0.2 percentage points to 88.5% during the first quarter of 2015.
Nursing care annual inventory growth was -0.3% in the first quarter of 2015, while annual absorption was -0.2%. Private pay rents for the sector grew 2.5% year-over-year this quarter, which is 0.2 percentage points below the pace of the prior quarter.
NIC MAP Seniors Housing & Care Market Fundamentals for 1Q15
The National Investment Center for Seniors Housing & Care (NIC) is a 501(c)(3) organization whose mission is to advance the quality and availability of seniors housing and care options for America’s elders. NIC provides research, education, and increased transparency that facilitate informed investment decisions, quality outcomes and leadership development in seniors housing and care.
Since 1991, NIC has been the leading source of research, data and analytics for owners, operators, developers, capital providers, researchers, academics, public policy analysts and others interested in meet-ing the housing and care needs of America’s seniors. NIC has proudly sponsored the Seniors Housing & Care Journal, a peer reviewed journal for applied research in the seniors housing and care field, since 1993. One of NIC’s major initiatives to further its mission is the NIC MAP® Data Service (NIC MAP). NIC MAP is a web-based suite of research and analysis tools that tracks and reports seniors housing and care data, enabling users to gain access to more than 13,000 properties within 99 U.S. metropolitan markets and more than 600 counties. Established in 2004, NIC MAP creates transparency for seniors housing and care by offering accurate, unbiased and actionable market-level data on all of the sector’s property types and care segments including independent living (IL), assisted living (AL), memory care (MC) and nursing care (NC). Our data is updated quarterly, monthly and weekly, and is inclusive of property-level inventory by unit type, sales transactions, properties under construction and in the planning phase, aggregated occupancy and rent comparables, demographics and much more. For more information, visit www.nic.org or call 410-267-0504.