Expanding on a recent NIC blog post that detailed care segment performance in the NIC MAP® 31 Primary Markets since the most recent Q42014 market cycle peak, and another blog post that went a step further and examined segment market fundamentals within Continuing Care Retirement Communities (CCRCs, also referred to as life plan communities) compared with those in non-CCRC freestanding or combined communities, the following narrative describes 3Q2018 CCRC occupancy aggregated from the NIC MAP Primary and Secondary Markets—99 of the nation’s largest core-based statistical areas (CBSAs), broken out across eight regions.
This analysis is useful for understanding the regional occupancy performance of independent living, assisted living, memory care and nursing care segments. The occupancy rate used was the “all occupancy” rate which includes units still in lease-up as well as those occupied.
Regional CCRC Care Segment Occupancy
Overall, the Northeast and Mid-Atlantic regions had the strongest performance in terms of CCRC occupancy across care segments, whereas the Mountain and Southwest regions performed relatively weaker.
- The Mid-Atlantic had the highest CCRC independent living segment occupancy (94.8%), followed by the Northeast and Pacific regions (93.7% and 93.5%, respectively). The Southwest region had the lowest CCRC independent living occupancy (88.6%).
- The Northeast had the highest CCRC assisted living occupancy (93.4%), followed by the Atlantic region (92.2%). The lowest CCRC assisted living occupancy was reported for the Mountain and Southwest regions (85.2% and 86.4%, respectively).
- Regarding CCRC memory care segment occupancy, the East North Central and Northeast had the highest (92.4% and 92.1%, respectively), whereas the Mountain region had the lowest memory care CCRC occupancy (77.9%).
- CCRC nursing care segment occupancy was highest in the Northeast (92.4%), while the Mountain and Southwest regions reported the lowest CCRC nursing care segment occupancy (80.5% and 81.2%. respectively).
CCRC Segments vs. Non-CCRC Segments
Across all regions, 3Q18 CCRC occupancy in the 99 Primary and Secondary metropolitan markets was 90.8%; five percentage points higher than non-CCRCs (85.8%). Generally speaking, this difference is perhaps due in part to the CCRC product profile, which tends to attract planners who wish to make one move to a continuum of care, or perhaps because new CCRC residents are generally healthier than residents in other types of seniors housing, resulting in lower resident turnover in CCRCs. Another potential reason for the difference is perhaps due to the inventory mix in the CCRC analysis aggregation (both entrance fee and rental payment options, combined). Note that 98.8% of non-CCRC segments were rental, whereas CCRC segments were comprised of 63.3% entrance fee and 36.7% rental payment models.
Interestingly, across care segments, occupancy at CCRCs was also generally higher than non-CCRCs. By care segment, the greatest differences in occupancy rates for CCRCs compared with non-CCRCs were reported for the memory care segment (6.7 percentage points), followed by the assisted living segment (5.4 percentage points), and the narrowest for the nursing care segment (2.6 percentage points).
- Independent living segment occupancy was three percentage points higher for CCRCs than non-CCRCs (92.3% vs. 89.3%). The greatest differences in CCRC independent living segment occupancy compared with non-CCRCs was reported for the Mid-Atlantic region (5.6 percentage points) and the East North Central region (4.1 percentage points).
- Assisted living segment occupancy was more than five percentage points higher for CCRCs than non-CCRCs (91.2% vs. 85.8%). The greatest differences in CCRC assisted living segment occupancy compared with non-CCRCs were found in the Mid-Atlantic and Southeast regions (differences of 7.8 and 7.7 percentage points, respectively), although large differences were also noted for the East North Central and Southwest regions.
- Memory care segment occupancy was more than six and a half percentage points higher for CCRCs than Non-CCRCs (89.4% vs. 82.7%). The greatest differences in CCRC memory care occupancy compared with non-CCRCs was found in the East North Central region (12.0 percentage points), the Southwest region (10.0 percentage points), and the Mid-Atlantic region (9.6 percentage points).
- Nursing care segment occupancy was about two and a half percentage points higher for CCRCs than non-CCRCs (88.0% vs. 85.3%). The West North Central and Southwest regions had the greatest differences in CCRC nursing care segment occupancy compared with Non-CCRCs (7.2 and 7.0 percentage points, respectively).
Non-CCRCs had higher occupancy than CCRCs in the following care segments by region: independent living in the West North Central region (a difference of 1.8 percentage points), memory care in the Mountain region (a difference of 3.1 percentage points), and nursing care in the Mountain and Pacific regions (differences of 1.1 and 0.6 percentage points, respectively).
Further analysis is needed to more fully explain regional differences in CCRC occupancy performance in comparison to non-CCRC segments. Contributing factors that could be explored include economic drivers such as industry mix, cost of doing business and living costs, employment growth, the health of the residential housing market in terms of home sales prices and velocity. Other considerations include income levels, inflation-adjusted purchasing power, prospective resident educational profiles, product acceptance and familiarity as well as penetration rates, longevity of the CCRC product in the area, and cultural differences.
The second installment of this two-part blog post will compare the regional occupancy performance of entrance fee and rental CCRCs.
