News & Press Releases
Seniors Housing Occupancy Stable, Asking Rents Post Significant Gains
Strong Demand for Independent Living Units in Third Quarter
FOR IMMEDIATE RELEASE: Wednesday, October 5, 2016
Contact: Biba Aidoo, 443-837-2430 or email@example.com
ANNAPOLIS, Md. – The occupancy rate for seniors housing properties in the third quarter of 2016 averaged 89.8%, as absorption of units outpaced net additions in inventory. This represented an increase of 0.1 percentage point from the prior quarter, and was down 0.1 percentage point from year-earlier levels. During the past three years, occupancy has averaged 89.8%. As of the third quarter of 2016, occupancy was 2.9 percentage points above its cyclical low of 86.9% during the first quarter of 2010 and 0.5 percentage point below its most recent high of 90.3% in the fourth quarter of 2014.
The occupancy rates for independent living properties and assisted living properties averaged 91.1% and 88.0%, respectively, during the third quarter of 2016. When compared to the prior quarter, the occupancy rate for independent living was up 0.2 percentage point. Occupancy for independent living was unchanged from year-earlier levels and down 0.2 percentage point from its seven-year high of 91.3% in the fourth quarter of 2015. The occupancy rate for assisted living was unchanged from the second quarter and down 0.2 percentage point from year-earlier levels.
Seniors housing annual absorption was 2.5% as of the third quarter of 2016, compared to 2.4% during the second quarter of 2016 and 2.0% one year earlier during the third quarter of 2015. The seniors housing annual inventory growth rate in the third quarter of 2016 was 2.6%, up 0.2 percentage point from the prior quarter.
“It was a very active quarter for independent living,” said Beth Burnham Mace, chief economist for NIC. “Nearly 2,500 units were absorbed on a net basis, the most in a single quarter since NIC’s data collection began in 2006. Inventory grew at a lesser 2,158 units and below the record pace of 3,268 units in early 2008. As a result, occupancy improved to 91.1%.”
For assisted living, inventory growth exceeded absorption for the fourth consecutive quarter, causing occupancy to fall from year-earlier levels.
Current construction as a share of existing inventory for seniors housing slowed 0.2 percentage point from its recent high of 6.0% to 5.8% as of the third quarter of 2016, although it is still up 0.1 percentage point from the third quarter of 2015.
Seniors housing construction starts during the third quarter of 2016 preliminarily totaled 4,168 units, which included 1,525 independent living units and 2,643 assisted living units. On a four-quarter basis, starts totaled 17,522 units, the weakest pace since the fourth quarter of 2014.
During the third quarter of 2016, the average rate of seniors housing’s annual asking rent growth was 3.8%, which was 0.6 percentage point above the prior quarter’s pace and 1.3 percentage points above its pace one year earlier during the third quarter of 2015.
“This was the fastest growth rate for asking rents since 2007—nearly ten years ago,” noted Chuck Harry, NIC’s chief of research and analytics. “From year-earlier levels, growth was fastest for independent living properties, whose asking rents increased by 4.2% compared to the 3.2% gain seen in assisted living properties.”
The nursing care occupancy rate decreased 0.3 percentage point to 86.8% during the third quarter of 2016.
The nursing care annual inventory growth rate was nearly zero in the third quarter of 2016, while annual absorption was down 0.7%. Private pay rents for the sector grew 2.8% year over year this quarter, the same rate as the prior quarter.
[Note: For 3Q16 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 established in 1991 whose mission is to enable access and choice by providing data, analytics and connections that bring together investors and providers. For more information, visit www.nic.org, and follow NIC on Twitter.
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 14,000 properties within 140 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, assisted living, 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, call 410-267-0504.