News & Press Releases
Seniors Housing Occupancy Slips Ten Basis Points in the First Quarter to 90.0%
Quarterly Construction Starts Fall Sharply for Both Independent Living and Assisted Living Units
FOR IMMEDIATE RELEASE: Wednesday, April 6, 2016
Contact: Biba Aidoo, 410-267-0504 or email@example.com
ANNAPOLIS, Md. – The average occupancy rate for seniors housing properties in the first quarter of 2016 was 90.0%, as net additions in inventory outpaced absorption of units. This represented a decrease of 0.1 percentage point from the prior quarter, and was unchanged from year-earlier levels. Occupancy has been hovering near 90.0% for the past two years. As of the first quarter of 2016, occupancy was 3.2 percentage points above its cyclical low of 86.9% during the first quarter of 2010.
The occupancy rate for independent living properties and assisted living properties averaged 91.3% and 88.3% respectively during the first quarter of 2016. When compared to the prior quarter, the occupancy rate for independent living was down 0.1 percentage point from its eight-year high in the fourth quarter, while the occupancy rate for assisted living was unchanged from both fourth quarter and year-earlier levels. Occupancy for independent living was up 0.1 percentage point from year-earlier levels.
During the first quarter of 2016, the rate of seniors housing’s annual asking rent growth was 3.0%, which was 0.3 percentage point above the prior quarter’s pace and 0.5 percentage point above its pace one year earlier during the first quarter of 2015.
Chuck Harry, NIC’s chief of research and analytics, said, “The pace of asking rent growth was its highest since 2008. This strong same-store rent growth reflects the market’s current relatively balanced supply and demand trends, as absorption has largely kept pace with strong inventory growth during the past couple of years.”
Seniors housing annual absorption was 2.5% as of the first quarter of 2016, compared to 2.1% during the fourth quarter of 2015 and 2.2% one year earlier during the first quarter of 2015.
Seniors housing annual inventory growth rate in the first quarter of 2016 was 2.5%, up 0.2 percentage point from the prior quarter and its strongest pace since 2009. Current construction as a share of existing inventory for seniors housing slowed 0.2 percentage point to 5.5% as of the first quarter of 2016, though it is still up 0.4 percentage points from the first quarter of 2015.
Seniors housing construction starts during the first quarter of 2016 preliminarily totaled 2,737 units, comprised of 802 independent living units and 1,935 assisted living units. On a four-quarter basis, starts totaled 19,243 units, its weakest pace in a year.
“Inventory growth continues to pressure occupancy rates,” noted Beth Burnham Mace, chief economist for NIC. “It’s notable, however, that the first quarter of 2016 data on starts showed a marked slowdown in activity for the second consecutive quarter. The decline in starts may suggest that the market is responding to well-publicized concerns about supply.”
The nursing care occupancy rate increased 0.1 percentage point to 87.4% during the first quarter of 2016.
Nursing care annual inventory growth was 0.1% in the first quarter of 2016, while annual absorption was down 0.9%. Private pay rents for the sector grew 2.8% year over year this quarter, which was down 0.2 percentage point from the prior quarter.
[Note: For 1Q16 NIC MAP data specific to your local metro market, please refer to the regional key metrics charts.]
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—from independent living, assisted living, and memory care, to skilled nursing and post-acute care . NIC provides research, education, and increased transparency that facilitate leadership development, quality outcomes, and informed investment decisions with respect to 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 meeting 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’s web-based suite of research and analytic tools track and report seniors housing and care data for more than 13,000 properties within 99 U.S. metropolitan markets. 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, and nursing care, as well as continued care retirement communities (CCRCs). 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.