This blog features the NIC Analytics Demand Pulse Metric (DPM) for third quarter 2021 (3Q2021), a measure that examines senior housing demand (occupied units) for the NIC MAP^® 31 Primary Markets and provides a window into the strength of a market based on occupied stock trends. The demand pulse metric pinpoints when 3Q2021 demand levels were last seen before the pandemic began to influence the senior housing sector in 1Q2020 and tracks demand growth and progress across the 31 Primary Markets.

Aggregate Market Demand Pulse

Third quarter 2021 NIC MAP^® data, powered by NIC MAP Vision, showed the largest improvement in demand in a single quarter since NIC MAP^® began to report the data in 2005. For the 31 Primary Markets, 12,318 units were absorbed on a net basis, a 2.3% increase from the prior quarter. This pushed occupied units back to their 2Q2018 level. Said another way, it was 1.75 years (7 quarters) ago – counting back from pre-pandemic 1Q2020 levels – that occupied units equaled the level achieved in 3Q2021. Prior to the 3Q2021 jump in net absorption, occupied units had only recovered to their 2Q2017 levels (2.75 years or 11 quarters, counting back from pre-pandemic 1Q2020 levels). And while a very welcomed improvement, 3Q2021 occupied stock was still 4.7% below pre-pandemic 1Q2020 levels.

The DPM Exhibit below provides a visual of these metrics for the Primary Markets as well as the individual metropolitan markets that comprise the aggregate measure.

Market-Specific Demand Pulse

Based on the positive momentum in net absorption patterns in 3Q2021, the level of occupied units in both Washington, D.C. and Kansas City had returned to 1Q2020 pre-pandemic levels. In fact, the level of occupied units in Washington exceeded pre-pandemic levels by 0.9%, while demand in Kansas City was near 1Q2020 levels and fell short by only 55 units, equivalent to a gap of merely 0.4% compared with 1Q2020 levels.

There were 10 markets where occupied units in 3Q2021 were at levels seen as recently as one year ago or less compared with 1Q2020 levels. This includes Atlanta (3Q2021 demand was the same as in 4Q2019 and remains 1.9% below 1Q2020 levels), Orlando (same as 3Q2019); Minneapolis, Sacramento, Cleveland, Houston and Las Vegas (same as 2Q2019); Dallas, Phoenix and Denver (same as 1Q2019).

Despite the recent improvements in demand across all the 31 Primary Markets, the level of occupied units in 3Q 2021 remains far below 1Q2020 levels. This is the case for Pittsburgh, where the number of occupied units remains below levels reported since at least 2005, when NIC began reporting data. Similarly, the number of occupied units in Los Angeles remains below 1Q2020 levels by almost 10 years and is now at levels seen in 2Q2010, and San Jose remains eight years below 1Q2020 levels and is now at levels seen in 4Q2011. Notably, 3Q2021 demand relative to 1Q2020 levels in Los Angeles stood at negative 9.6%, while 3Q2021 demand in San Jose and Pittsburgh remains 7.0% and 6.9% below 1Q2020 levels, respectively.

This analysis suggests that factors that influence demand are stronger in some markets than in others and that there will be some markets that will return to pre-pandemic demand levels sooner while others will take longer. Separately, and not surprisingly, a recent analysis by NIC Analytics looked at the share of same-store properties within individual metropolitan markets that had reached their pre-pandemic occupied unit levels and found that the demand recovery paths and timelines for properties also varied significantly. Hence as property performance goes, so goes broader metropolitan area performance.

In summary, positive senior housing demand momentum was evident in both the 2Q2021 and 3Q2021 NIC MAP^® data after four consecutive quarters of pandemic-related weak demand. The upcoming 4Q2021 NIC MAP^® Quarterly Data Release on January 6, 2022, will showcase if the demand recovery continued to expand or slowed down, and which other markets have fully returned to pre-pandemic 1Q2020 demand levels and which ones continued to lag.

Exhibit: 3Q2021 NIC Analytics Demand Pulse Metric

Interested in learning more about NIC MAP data? To learn more about NIC MAP data, powered by NIC MAP Vision, schedule a meeting with a product expert today.

Did move-ins continue to outpace move-outs in the third quarter 2021? What were the rate discounting trends by segment? How did asking rates grow on a year-over-year basis? The 3Q2021 NIC MAP® Actual Rates Report, available to NIC MAP subscribers, offers third quarter data trends through September 2021 for actual rates and leasing velocity. We’ve summarized some of the key takeaways from the report below.

The following key takeaways are pulled from the NIC MAP Segment Type report. Care segments refer to the levels of care and services provided to a resident living in an assisted living, memory care or independent living unit.

Key Takeaways

• For the second quarter in a row, move-ins outpaced move-outs for all three care segments (independent living, assisted living, and memory care) in 3Q21. This marks seven consecutive months of move-ins outpacing move-outs, from March 2021 through September 2021.

• The memory care segment had the highest pace of move-ins of the three care segments in the third quarter at 3.9% of inventory in July and August of 2021. This was down from the recorded high of 4.7% of inventory in March of 2021, however.

• The year-over-year growth rate for assisted living asking rates reached the highest recorded level in the time series at 5.2% in September 2021. For independent living, the comparable rate was 2.5% in September 2021 and for memory care the rate was 1.6%. For memory care that was the highest pace since June 2019 when it was 1.7%.

• Average initial rates for residents moving into independent living, assisted living, and memory care segments were below average asking rates, with monthly spreads largest for memory care.

• • • In September 2021, memory care segment initial rates had a discount of 9.3% ($609) from asking rates, which equates to 1.1 months on an annualized basis. This is up from the prior year when the September 2020 discount was 7.5% ($487).

• • • Assisted living segments had an initial rate discount of 8.3% ($431) relative to asking rates in July 2021 and ended the quarter with a discount of 7.8% ($412) in September 2021. September’s assisted living initial rate discount is up from one year prior when it was 4.9% ($246).

Our Software Partners Support this Initiative

At the 2021 NIC Fall Conference in Houston, Texas, Glennis Solutions and Eldermark were proudly announced as being officially certified Actual Rates Software Partners. Glennis Solutions and Eldermark now offer their senior housing operator customers the ability to share their data more efficiently in the official NIC Actual Rates format. To receive certification, a software provider works with the NIC MAP Vision team to develop reports that meet the NIC Actual Rates standard format. They are then required to provide six months’ worth of actual rates data for two or more operators using those reports.

NIC and NIC MAP Vision appreciate the time, effort, and commitment from our software partners. We thank Glennis Solutions and Eldermark for their partnerships and recognize their accomplishments in receiving official certification status.

The Actual Rates Data Initiative is driven by the need to continually increase transparency in the seniors housing sector and achieve greater parity to data that is available in other real estate asset types. Now, more than ever, having access to accurate data on the actual monthly rates that a senior housing resident pays as compared to property level asking rates helps the sector achieve this goal.

About the Report

The NIC MAP^® Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,600 properties across the U.S. operated by 25 to 30 seniors housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage five or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

While these trends are certainly interesting aggregated across the states, actual rates data is even more useful at the metro level. NIC MAP Vision currently reports on the Atlanta, Philadelphia, and Phoenix metropolitan markets, and is continuing to work towards reporting more markets.

Interested in Participating?

The Actual Rates Data Initiative is an effort to expand seniors housing data and we are looking for operators who have five or more properties to participate. We have expertise in extracting data from industry leading software systems, such as Yardi, PointClickCare, Alis, MatrixCare, Glennis Solutions, and Eldermark and can facilitate the process for you.

Operators contributing data to the NIC MAP Actual Rates report receive a complimentary report which allows them to compare their own data against national, and metropolitan market benchmarks.

In addition to receiving a complimentary report, your organization benefits through:

• • More informed benchmarking, strategic planning, and day-to-day business operations,
    Increased transparency, aligning with other commercial real estate assets in terms of data availability,

• • Saved time, Actual Rates data is collected electronically directly from operators’ corporate offices, removing the need for telephone calls to individual properties, and

• • Enhanced investment and efficiency across the sector.

Learn more.

Since the start of the pandemic, senior housing properties have all experienced wide-ranging pandemic-related challenges, but the depth of the demand contraction has differed across markets.

As senior housing demand began to recover in the second quarter of 2021 and registered its strongest increase the following quarter (3Q2021), NIC MAP® data, powered by NIC MAP Vision, shows that certain markets are recovering quickly, while others continue to lag. Due to the skewed pandemic impact the sector has experienced, the demand recovery paths and timelines are proving to be uneven across both markets and properties.

Methodology

• In this analysis, we examine senior housing demand recovery across the 31 NIC MAP Primary Markets by looking at the share of “same-store” properties where pre-pandemic occupied unit levels have been achieved. Same store is defined as properties that have been open and reporting data at least since 3Q2019, three full quarters before the pandemic began to influence the senior housing sector. Within the 31 NIC MAP Primary Markets aggregate, we identified 4,863 same-store senior housing properties.
• This analysis is based purely on demand, as defined by changes in net absorption or occupied units and does not take supply conditions within the same-store properties into account. Additionally, closed and newly opened properties since 3Q2019 have been excluded from this analysis.
• The concept of demand or the number of occupied units is critically important to evaluate senior housing markets’ recovery. Occupancy rates are a broader concept and take into account new supply or newly opened units in the last 18 months, in addition to the upcoming inventory currently under construction.

Senior Housing Demand Recovery

• Exhibit 1 below shows that 1Q2020 pre-pandemic occupied unit levels have been achieved or surpassed in nearly one-third (31.3% – equivalent to 1,521 properties) of same-store properties within the NIC MAP Primary Markets aggregate. In fact, occupied units within this cohort grew by about 14,100 units between the first quarter of 2020 and the third quarter of 2021, equivalent to 10.6% of pre-pandemic occupied stock. Further, the occupied stock in this cohort as a share of overall demand within the 4,863 properties identified in this analysis went from 24% in 1Q2020 to 29% in 3Q2021, up five percentage points.
• By contrast, the number of occupied units within roughly two-thirds of properties (68.7%) in 3Q2021 remained substantially below pre-pandemic 1Q2020 levels, with 51,000 units still placed back in the market, equivalent to 12.3% of pre-pandemic occupied stock. Additionally, the occupied stock in this cohort as a share of overall demand went from 76% in 1Q2020 to 71% in 3Q2021, down five percentage points.
• The COVID-19 pandemic recovery has been uneven between markets and properties. If we were to graph this recovery, we would get a shape that resembles a “K,” with an increase in the share of occupied stock across properties that have already achieved or surpassed pre-pandemic occupied unit levels, and a decrease in the share of occupied stock across properties where demand remains below pre-pandemic levels.

Exhibit 1: Share of Same Store Properties Where Pre-Pandemic Occupied Unit Levels Have Been Achieved


Market-Specific Demand Recovery

• Drilling deeper into select metropolitan markets within the NIC MAP Primary Markets, Houston and Las Vegas had the largest share of same store properties where 3Q2021 occupied units have returned to the same level or exceeded 1Q2020 pre-pandemic occupied unit levels at 43.6% and 42.9%, respectively, while San Jose had the smallest share among the 31 Primary Markets at 13.3%. Notably, San Jose is a bit of an anomaly. It is one of the very few markets that has experienced negative inventory growth associated with units being pulled off the market throughout the pandemic, and some of these units were occupied in 1Q2020.
• Overall, pre-pandemic occupied units across 14 of the 31 Primary Markets have been achieved or surpassed in at least 30% of the same store properties within each market, some of these markets include Washington (39.1%), Dallas (39.1%), Detroit (31.7%), and Boston (31.4%). Other than San Jose, the lowest shares of same-store properties where pre-pandemic occupied units have been achieved or surpassed were seen in Sacramento (23.1%), Miami (24.8%), and Los Angeles (25.0%).

Aggregate Market Demand Growth

• Exhibit 2 below provides another way to look at demand growth, comparing the share of same store properties reporting an increase, decrease, or no change in occupied units (quarter-to-quarter) since 3Q2019. Notably, the market’s initial contraction was identified in the second quarter of 2020, and developed over subsequent quarters, through the first quarter of 2021. As demand improved in the second quarter of 2021, seniors housing properties began to see promising signs of improvement. This has translated to increases in demand within 46% of same store seniors housing properties within the aggregated 31 NIC MAP Primary Markets.
• In the third quarter of 2021, the share of properties reporting an increase in occupied units rose by six percentage points to 53% as demand improved and registered its strongest increase in the number of occupied units since NIC MAP began reporting the data back in 2005. At the same time, 20% of properties reported no change in the number of occupied units from the second quarter of 2021, and 27% of properties reported a decrease in occupied units over the same period, down eight percentage points from the second quarter of 2021. This was the smallest share recorded throughout the pandemic.
• While the majority of same store senior housing properties (53%) experienced an increase in demand in the third quarter of 2021, with 16,600 occupied units absorbed in one quarter, demand continued to trend downward across 27% of properties, with 8300 units lost or placed back in the market, half of the units absorbed by those properties reporting an increase in demand.
• The key takeaway from this analysis is that the path to recovery looks different at the property level and will be influenced by how resilient properties were in 2020 and the first half of 2021. If we look at the second quarter of 2020, while the majority of senior housing properties experienced a dramatic decrease in occupied units (20,800 occupied units lost in one quarter), 22% of properties did relatively better and even experienced an increase in occupied units with 5,600 units absorbed at the height of the pandemic.

Exhibit 2: Share of Same Store Properties by Demand Growth (Quarter-to-Quarter)

As the recovery in senior housing continues and as the industry continues to navigate its way through the pandemic, there are likely to be further twist and turns, and ups and down, but the sector has proven itself to be agile and resilient and will bounce back. That said, and as this analysis has shown, the recovery paths and timelines of demand may differ from one market to another, and from one property to another.

Interested in learning more about NIC MAP^® data? To learn more about NIC MAP data, powered by NIC MAP Vision, schedule a meeting with a product expert today.

In the Wave 35 survey, nearly half of organizations with multiple properties (45%) reported staff shortages in all their properties—up from roughly one-third (30%) in the Wave 24 survey conducted mid-March. While attracting community and caregiving staff remains a significant challenge, the percentage of organizations citing staff turnover increased from about one-half (53%) to more than two-thirds (70%) since mid-June. When asked about backfilling staffing shortages, three-quarters (77%) of organizations currently employ agency or temp staff. While more than half (57%) indicated that their agency/temp staff use increased by up to 50% this year, significantly, one out of five (20%) said it increased by 100%. Nearly one-half of organizations with nursing care beds saw an improvement in occupancy (47%) up from 38% in Wave 34. Optimism regarding near-term occupancy recovery to pre-pandemic levels is flagging somewhat from recent surveys. In the Wave 33 survey conducted in September, roughly four out of five respondents expected their organization’s occupancy to recover sometime in 2021 or 2022. That sentiment shifted in Wave 35: nearly nine out of ten organizations expect their occupancy to recover in 2022 or later, with one-quarter (26%) now expecting it to occur in 2023.

–Lana Peck, Senior Principal, NIC

NIC’s Executive Survey of operators in seniors housing and skilled nursing is designed to deliver transparency into market fundamentals in the seniors housing and care space as market conditions continue to change. This Wave 35 survey includes responses from November 8 to December 5, 2021, from owners and executives of 72 small, medium, and large seniors housing and skilled nursing operators from across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties.

Detailed reports for each “wave” of the survey and a PDF of the report charts can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights.

Wave 35 Summary of Insights and Findings

• Lead volumes are improving. In Wave 35, more than one-third of organizations had lead volume at pre-pandemic levels (36%), up from 20% in April 2021 (and 33% in Wave 34).

• The share of organizations that reported that the pace of move-ins accelerated in the past 30-days did not change significantly in Wave 35. Between 39% and 44% of organizations reported an acceleration in their pace of move-ins, with the range varying based on the care segment type. Presumably, due to need-based moves rather than choice-based moves, fewer organizations with nursing care beds reported a deceleration in the pace of move-ins since the summer when the delta variant of the COVID-19 virus was in broad circulation.

• Considering the pace of move-outs in the past 30-days, no change was reported by the majority of organizations across care segments. However, one-quarter of organizations with assisted living units (26%) noted an increase in the pace of move-outs.

  

• The chart below illustrates the pace of move-ins experienced by organizations with assisted living units across their portfolio of properties since the beginning of the pandemic (impacting events are observed in the footnotes). The recent slowdown in the pace of move-ins since the Wave 30 survey conducted in June may be due to the spread of the COVID-19 delta variant or waning pent-up demand following the unprecedented third quarter 2021 pace of absorption tracked by NIC MAP Vision, or it could be due to typical patterns of seasonality. The omicron variant may add some uncertainty until we learn more about its characteristics.

• In Wave 35, one-quarter of organizations with assisted living units (24%) saw a decline in occupancy typically associated with natural attrition and transfers to memory care and/or nursing care segments, both of which saw more growth in occupancy than in the prior survey. Nearly one-half of organizations with nursing care beds saw an improvement in occupancy (47%), up from 38% in Wave 34.

• Since the Wave 33 survey conducted in September, the share of organizations (of all sizes ranging from single properties to hundreds of properties) reporting staff shortages have oscillated around 100%. Digging deeper, in the Wave 35 survey, nearly half of organizations with multiple properties (45%) reported staff shortages in all their properties—up from roughly one-third (30%) in Wave 24 conducted mid-March.

• Respondents are routinely asked to rank the biggest challenges facing their organizations. Since August, more than four out of five respondents indicated that attracting community and caregiving staff was among their biggest challenges. As shown below, challenges due to staff turnover increased from about half (53%) to more than two-thirds (70%) since mid-June.

• NOI has been pressured for many operators due to the impact of labor shortages and higher wages on expenses, rising insurance costs, inflation-related higher-priced materials, the pandemic-related decline in occupancy rates, and the inability to grow rents. When asked how they are backfilling staffing shortages, 100% of respondents cited overtime hours since Wave 31 (data collected between July 12 and December 5). Currently, 77% of organizations indicated using agency or temp staff.
• In Wave 35, a new question was asked to better understand and track operators’ employment of expensive agency/temp staff to backfill staffing shortages. As shown in the chart below, more than half (57%) indicated that their use of agency/temp staff increased by  50% this year. However, one out of five surveyed (20%) said it increased by 100% (and a few respondents remarked that it increased more than 100%).

• Optimism regarding near-term occupancy recovery is flagging somewhat from recent surveys. In Wave 33 conducted in September, roughly four out of five respondents expected their organization’s occupancy to return to pre-pandemic levels sometime this year or in 2022. That sentiment shifted in Wave 35. Currently, nine out of ten organizations (87%) expect their occupancy recovery to occur in 2022 or beyond, with one-quarter (26%) now expecting it in 2023.

Wave 35 Survey Demographics

• Responses were collected between November 8 and December 5, 2021, from owners and executives of 72 seniors housing and skilled nursing operators from across the nation. Owner/operators with 1 to 10 properties comprise roughly two-thirds (63%) of the sample. Operators with 11 to 25 and 26 properties or more make up 37% of the sample (18% and 19%, respectively).
• Approximately one-half of respondents are exclusively for-profit providers (54%), one-third operate not-for-profit seniors housing and care organizations (33%), and 13% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 69% of the organizations operate seniors housing properties (IL, AL, MC), 19% operate nursing care properties, and 39% operate CCRCs (aka Life Plan Communities).

  Owners and C-suite executives of seniors housing and care properties, please help us tell an accurate story about our industry’s performance.

  The current survey is available and takes 5 minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please contact Lana Peck at lpeck@nic.org to be added to the list of recipients.

  NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and create a comprehensive and honest narrative in the seniors housing and care space at a time when trends are continuing to change in our sector.

Omicron Variant an Added Risk as 2021 Comes to a Close.

NIC MAP^® data, powered by NIC MAP Vision, released its latest Skilled Nursing Monthly Report on December 2, 2021, which includes key monthly data points from January 2012 through September 2021.

Here are some key takeaways from the report.

Occupancy

After seven months in a row of increases, skilled nursing property occupancy declined from August to September, decreasing 27 basis points to 75.1%. Nevertheless, occupancy was still 355 basis points above the low point of 71.5% reached in January 2021. In general, there remains cautious optimism about improving occupancy trends but there remain challenges including the rapid spread of the contagious COVID-19 delta variant in the summer and fall months as well as labor shortages, which have caused some properties to limit new patient admissions. In addition, there is potential for additional challenges due to a lack of booster shot prioritization among skilled nursing properties, the arrival of the fall/winter season, spread of the new omicron variant, and persistent labor shortages. Occupancy remains very low compared to February 2020 pre-pandemic levels of 85.7% (10.6 percentage points).

Medicare

Medicare revenue per patient day (RPPD) increased by $2.82 (0.5%) from August, to end September 2021 at $565. Despite the gain, it remained 1.5% below its December 2020 level ($573.68) when cases in skilled nursing properties were spiking and RPPD was higher likely because the federal government had implemented initiatives to aid Medicare fee-for-service reimbursements for situations such as providing higher rates to help care for COVID-19 positive patients requiring isolation. Meanwhile, Medicare revenue mix continued to decline, falling 33 basis points from August to end September at 19.9%, a time-series low. It has been falling since January 2021 when it was 24.9%, the time of peak COVID-19 cases.  

Managed Care

Managed Medicare revenue mix held relatively steady from August to September at 10.5%. It was down from its recent high of 11.2% in February but was up from the pandemic low set in May 2020 of 8.4%. The increase may be due to growth in elective surgeries from the prior year; elective surgeries often create additional referrals to skilled nursing properties. Meanwhile, Managed Medicare revenue per patient day (RPPD) increased from $447 to $449 in September but was down 3.2% from last year in September 2020.  It has decreased $104 (18.8%) from January 2012 and continues to create pressure on operators’ revenue as Managed Medicare enrollments grow around the country.

Medicaid

Medicaid patient day mix increased to 66.3% in September, up from the pandemic low of 63.2% set in January 2021. On the other hand, Medicaid revenue mix deceased in September to 50.0%, representing half of all property revenue. In addition, it has increased 314 basis points from the pandemic low of 46.9% set in December 2020. Meanwhile, Medicaid revenue per patient day (RPPD) decreased $1 from August to end September 2021 at $242. However, the latest monthly data in September still represents a 3.3% increase from pre-pandemic levels of February 2020 ($235). Medicaid reimbursement has increased more than usual as many states embraced measures to increase reimbursement related to the number of COVID-19 cases.

To get more trends from the latest data, download the Skilled Nursing Monthly Report. There is no charge for this report.

The report provides aggregate data at the national level from a sampling of skilled nursing operators with multiple properties in the United States. NIC continues to grow its database of participating operators in order to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form. NIC maintains strict confidentiality of all data it receives.

Interested in learning more about NIC MAP data? To learn more about NIC MAP data, powered by NIC MAP Vision, schedule a meeting with a product expert today.