The recently released NIC MAP^® Data, powered by NIC MAP Vision, show that the seniors housing occupancy rate remained unchanged for the aggregated 31 NIC MAP Primary Markets in the second quarter of 2021. However, a recent analysis by NIC Analytics digs further and finds a substantial rise in the share of properties with increasing occupancy rates in 2Q2021.

Notably, 47.1% of seniors housing properties within the NIC MAP Primary markets reported an increase in occupancy rates in 2Q2021 compared with 1Q2021, a relatively higher proportion compared with levels seen during the pandemic and the most since 2Q2019 (pre-pandemic levels). This shows that positive demand is returning, consumer confidence is building, and suggests that the outlook for seniors housing occupancy remains optimistic.

In this blog, we examine occupancy change at the most granular level within the NIC MAP Primary Markets aggregate and across select metropolitan markets to assess seniors housing properties’ performance and occupancy growth.

Top Findings:

• In 4Q2020 and 1Q2021, about one-third of seniors housing properties within the 31 Primary Markets reported an increase in occupancy rates. This shows that these properties have been able to attract new residents and have been generally resilient.
• A bit more than 47% of seniors housing properties within the NIC MAP Primary markets reported an increase in occupancy rates in 2Q2021, a relatively higher share compared with levels seen during the pandemic and the most since 2Q2019 (pre-pandemic levels).
• Of the 31 Primary Markets, all but one saw improvements in the share of properties reporting an increase in occupancy rates in 2Q2021. Nonetheless, new inventory and dispersion in demand growth between properties continued to put downward pressure on occupancy rates across eight of the 31 Primary Markets.
• Both inventory and the total number of occupied units for the NIC MAP Primary Markets grew by about 0.7% from 1Q2021 levels leaving the seniors housing occupancy rate for the NIC MAP Primary Markets unchanged at 78.7%. However, many individual properties experienced improved occupancy.
• Occupancy improvement will be shaped by local patterns of inventory growth and demand, and will be influenced by the broad economy, consumer confidence, ease of development, the pandemic and vaccination rates.
• The 68 NIC MAP Secondary Markets share of properties reporting improvements in occupancy rates increased substantially and was 50.8% in 2Q2021.
• Detroit and Atlanta had the largest share of properties reporting an increase in occupancy rates at about 55% in the second quarter of 2021, while Baltimore had one of the smallest shares at 34.8%.
• San Jose had a noteworthy improvement in the share of properties reporting increasing occupancy rates at 46.9% in 2Q2021, but occupancy remains very low by historic standards.

Following the onset of the pandemic in March 2020, the share of seniors housing properties reporting an increase in occupancy rates was 22.5% in 2Q2020, down from 38% in the pre-covid 1Q2020 and the lowest share since NIC began reporting data in 2005. On the other hand, 58.1% of properties reported a decrease in occupancy, the highest share since NIC began reporting data.

As the pandemic continued to evolve, the share of properties reporting an increase in occupancy rates began to gradually improve in 3Q2020 and 4Q2020. Conversely, the share of properties reporting a decrease in occupancy began to gradually decrease over the same period. In fact, based on this occupancy measure, about one-third of seniors housing properties within the 31 Primary Markets have been “pandemic-resilient” in the fourth quarter of 2020 and the first quarter of 2021.

Aggregate Market Performance. Exhibit 1 below shows that seniors housing properties began to see promising signs of rebound in 2Q2021. This has translated to improvements in occupancy rates within 47.1% of seniors housing properties within the aggregated 31 NIC MAP Primary Markets average and across twenty of the 31 Primary Markets.

Notably, the share of properties reporting an increase in occupancy rate improved across 30 of the 31 Primary Markets in the second quarter of 2021, although aggregated occupancy for seniors housing in the Primary Markets was unchanged at 78.7%. This is largely due to new inventory and dispersion in demand growth between properties. Both inventory and the total number of occupied units for the 31 Primary Markets grew by about 0.7% from 1Q2021 levels.

At the market level, 8 of the 31 Primary Markets saw continued downward pressure on occupancy rates. New inventory is an important factor driving occupancy growth. As positive demand continues to build momentum and net absorptions exceeds inventory growth, the NIC MAP Primary Markets aggregate should begin to see an improvement in occupancy, but the recovery is likely to vary by market according to variations in local supply and demand conditions.

Exhibit 1 – Share of seniors housing properties by occupancy change within the NIC MAP Primary Markets.

Market-Specific Performance. From 1Q2020 to 1Q2021, about 18% of properties within the 31 Primary Markets and 18% of properties within the 68 Secondary Markets aggregates reported an increase in occupancy rates. In 2Q2021, the shares of properties reporting improvements in occupancy rates from 1Q2021 for the 31 Primary Markets and 68 Secondary Markets increased substantially and was 47.1% and 50.8%, respectively.

Drilling deeper into select metropolitan markets within the NIC MAP Primary Markets, Detroit and Atlanta had the largest share of properties reporting an increase in occupancy rates at about 55% in the second quarter of 2021, while Baltimore had one of the smallest shares at 34.8%. In fact, occupancy in Baltimore continued to slip further from 81.1% in 1Q2021 to 79.6% in 2Q2021. The occupancy drop in Baltimore was largely due to negative absorption.

Interestingly, San Jose, one of the hardest-hit markets during the pandemic, had a noteworthy improvement in the share of properties reporting increasing occupancy rates in 2Q2021. The average occupancy rate in San Jose improved by 0.4pps from 83.3% in 1Q2021 to 83.7% in 2Q2021 but remains 11.1pps below March 2020 levels and very low by historic standards. The slight improvement in occupancy rates in San Jose was mainly driven by negative inventory growth associated with units being pulled off the market.

Exhibit 2 – Share of seniors housing properties by occupancy change within the NIC MAP aggregates and select metropolitan markets.

The path of future occupancy patterns is going to be shaped by supply-demand balances, and the full recovery depends on the course of the pandemic, vaccination rates, economic growth, ease of development and a restoration of consumer confidence.

To learn more about which of the NIC MAP Primary Markets performed better at the property level during the pandemic and to learn more about NIC MAP Data, powered by NIC MAP Vision, and the additional underlying data only available to NIC MAP clients, schedule a meeting with a product expert today.

The following analysis examines current conditions and year-over-year changes in inventory, occupancy, and same-store asking rent growth—by care segments within CCRCs (CCRC segments) compared to non-CCRC segments in freestanding or combined communities to focus a lens on the relative performance of care segments within CCRCs during the second quarter of 2021.

The analysis leverages NIC MAP^® data, powered by NIC MAP Vision, an affiliate of NIC. NIC MAP data tracks occupancy, asking rents, demand, inventory, and construction data for independent living, assisted living, memory care, skilled nursing, and continuing care retirement communities (CCRCs, also referred to as life plan communities) for more than 15,000 properties across 140 metropolitan areas. NIC MAP Data currently tracks 1,208 not-for-profit and for-profit entrance fee and rental CCRCs in these 140 combined markets (1,134 in the 99 combined Primary and Secondary Markets).

Current CCRC Occupancy by Payment Type and Profit Status

From 2Q 2020 to 2Q 2021, the cumulative drop in CCRC occupancy was 4.8 percentage points from 89.1% to 84.4%. For context, CCRC occupancy in the second quarter fell 7.1 percentage points from pre-pandemic levels (1Q 2020). Non-CCRC occupancy averaged 75.4% in 2Q 2021—a very wide 9.0 percentage points lower than CCRC occupancy. On a year-over-year basis, entrance fee CCRC occupancy (87.3%) was 7.8 percentage points higher than rental CCRCs (79.5%), and not-for-profit CCRC occupancy (86.1%) was 6.5 percentage points higher than for-profit CCRCs (79.6%).

CCRCs vs. Non-CCRCs: Care Segment Detail

The table below compares each of the care segments—independent living, assisted living, memory care and nursing care—in the Primary and Secondary Markets. The table shows the 2Q 2021 total open units, occupancy and average monthly asking rent—and year-over-year changes for CCRCs and non-CCRCs.

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Independent living occupancy nearly 10 percentage points higher than non-CCRC

The CCRC independent living care segment had the highest 2Q 2021 occupancy (88.4%), followed by CCRC assisted living and memory care (82.7%, respectively). The difference in 2Q 2021 occupancy between CCRCs and non-CCRCs was the highest for the independent living segment (9.6 percentage points), and the lowest for the nursing care segment (2.8 percentage points).

While overall occupancy declined from year-earlier levels for each of the care segments, CCRCs had lesser declines in overall occupancy than non-CCRCs. The differences are in part due to the relative influence of the majority inventory mix. The CCRC independent living care segment (which represents 55.5% of CCRC units) garnered the highest occupancy in the second quarter of 2021 (88.4%), as well as the smallest year-over-year drop in occupancy, falling 3.4 percentage points. The current nursing care segment occupancy rate in non-CCRCs, which represents 51.2% of non-CCRC units, was much lower at 74.4%, and fell 5.5 percentage points year-over-year.

The highest year-over-year asking rent growth was in the CCRC nursing care and memory care segments (2.1% and 2.0, respectively). The lowest was noted for non-CCRCs in the independent living care segment (0.0%). Note, these figures are for asking rates and do not consider any discounting that may be occurring.

A long-term phenomenon, CCRCs had lower rates of inventory growth (year-over-year change in inventory) by segment than non-CCRCs. Negative inventory growth was reported for CCRCs in the nursing care segment (-1.0%). Negative inventory growth can occur when units/beds that are temporarily or permanently taken offline or converted to another care segment outweigh added inventory.

Wide disparity in regional CCRC median occupancy performance

For benchmarking purposes, some investors and operators prefer to measure themselves against the median occupancy rate, assuming that the properties that support a higher median rate are of higher institutional quality. The table below illustrates the median occupancy rates in each region.

In the second quarter of 2021, three out of eight regions had median CCRC occupancy higher than the national median rate (Mid-Atlantic, Northeast and Pacific).

The strongest CCRC median occupancy rate is in the Mid-Atlantic region and the weakest is in the Southwest region. It is notable that the difference between the Southwest’s CCRC median occupancy rate (80.1%) and the Mid-Atlantic’s CCRC median occupancy rate (87.9%) is nearly eight percentage points underscoring the wide disparity in CCRC occupancy performance.

Look for future blog posts from NIC to delve deep into the performance of CCRCs.

Interested in learning more?

To learn more about NIC MAP data, powered by NIC MAP Vision, and about accessing the data featured in this article, schedule a meeting with a product expert today.

*This blog was originally published in Ziegler Investment Banking, Senior Living Finance Z-News.

“As the market fundamentals in seniors housing and care continue to trend positively since the COVID-19 vaccine became available, and operators are shifting gears from reacting to the threat of contagion in their communities to recovering census, many are finding their organizations returning to some form of operational normalcy in the face of considerable labor challenges. Wages and benefits are typically significant operating expenses for seniors housing and care providers even in the best of times. In the Wave 30 survey, about half of respondents reported that attracting community and caregiving staff was the biggest challenge their organizations are facing 16 months into the pandemic.Since the Wave 27 survey conducted in the latter half of April, the share of organizations experiencing staffing shortages in their properties has risen above 90%, and in the Wave 30 survey, four in five organizations (80%) with multiple properties have staffing shortages in more than half of their properties—up from two-thirds (64%) in Wave 29. In the July edition of the NIC Insider Newsletter, Beth Mace, NIC’s Chief Economist, considers a number of strategies to mitigate labor market challenges.”

–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 30 survey includes responses collected June 14 to July 11, 2021 from owners and executives of 71 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 30 Summary of Insights and Findings

• Between one-half and more than two-thirds of respondents note that the pace of move-ins accelerated in the past 30-days. The shares of organizations reporting acceleration in the pace of move-ins were highest for the nursing care (70%) and independent living care segments (64%).

• Increased resident demand has been cited by nine out of ten respondents as a reason for acceleration in move-ins since the Wave 25 survey conducted in the latter half of March (around the time occupancy rates may have reached bottom). However, the Wave 30 survey suggests a slight pullback in the percent of respondents who see their leads volumes at pre-pandemic levels perhaps due to release of pent-up demand from the pandemic starting to wane as folks who had been previously waiting on the sidelines have been moving in since the spring. Currently, roughly one in four (27%) report lead volume at pre-pandemic levels compared to about one in three between May 3 and June 13 (35% and 34%, respectively). As shown in the chart below, before the vaccine was distributed, roughly 30% of organizations surveyed had a backlog of residents waiting to move in. As move-ins have increased, organizations with a backlog have decreased.

• The chart below illustrates the full time series of Executive Survey Insights data collected since near the beginning of the pandemic to July 11 regarding the pace of move-ins for the assisted living care segment. Looking across 30 waves of survey responses one can see the improvement in the pace of move-ins (blue segments) after the vaccine was distributed, in sharp contrast to the significant deceleration in the pace of move-ins witnessed earlier in the pandemic (orange segments) as operators halted admissions to protect lives.

• Since mid-March, the average rates of community vaccinations have leveled off at around 65%. Despite reports from some operators that they will require employees to be vaccinated in line with vaccination policies already in place for influenza and other communicable diseases, only about one in five (21%) respondents in the Wave 30 survey indicate they likely will institute a staff COVID-19 vaccination mandate. Among those that definitely or probably will, more are not-for-profit providers. 

• Nursing care occupancy is still improving. Three-quarters of organizations with nursing care beds saw occupancy increases (76%); higher than about 40% of organizations with independent living, 50% of organizations with memory care, and 55% of organizations with assisted living residences.
• The share of organizations that expect their occupancy to return to pre-pandemic levels has remained consistent since the question was first asked in the latter half of February. In Wave 30, just under two-thirds of respondents (62%) anticipate occupancy will have rebounded by next year.

• Since the Wave 27 survey conducted in the latter half of April, the share of organizations experiencing staffing shortages in their properties has risen above 90%, and in the Wave 30 survey, four in five organizations (80%) with multiple properties have staffing shortages in more than half of their properties—up from two-thirds (64%) in Wave 29.
• Respondents were asked to rate the biggest challenge facing their organization today. In both Waves 29 and 30, around one-half (45%) indicated that attracting community and caregiving staff was their biggest challenge, followed by low occupancy rates and staff turnover. 

• Respondents were also asked to quantify the most effective method of attracting new community staff. Significantly, 63% indicated that increasing wages was most effective. In the July edition of the NIC Insider Newsletter, Beth Mace, NIC’s Chief Economist considers a number of strategies to mitigate labor market challenges.

• Executive Survey Insights respondents have enthusiastically offered suggestions for new survey questions based on current conditions in the marketplace. These suggestions will continue to be included in future surveys from time to time. In the Wave 30 survey, the Paycheck Protection Program (PPP), an SBA-backed loan that helped businesses keep their workforce employed during the COVID-19 crisis, was explored. The program ended on May 31, and existing borrowers may be eligible for PPP loan forgiveness once all of the loan proceeds for which the borrower requested forgiveness have been used. If borrowers do not apply for forgiveness within ten months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their lender.
• According to respondents to the Wave 30 survey, 70% of organizations received a PPP loan. About one-quarter, respectively, received $1M to $2M or more than $2M. The majority have applied for loan forgiveness (85%), and three-quarters have had their PPP loan forgiveness approved (none of the respondent organizations have been denied to date)

Wave 30 Survey Demographics

• Responses were collected between June 14 to July 11, 2021 from owners and executives of 71 seniors housing and skilled nursing operators from across the nation. Owner/operators with 1 to 10 properties comprise roughly half (56%) of the sample. Operators with 11 to 25 and 26 properties or more make up 44% of the sample (20% and 24%, respectively).
• Approximately one-half of respondents are exclusively for-profit providers (51%), and approximately one-half operate both not-for-profit (40%) and for-profit (9%) seniors housing and care organizations.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 72% of the organizations operate seniors housing properties (IL, AL, MC), 41% operate nursing care properties, and 35% 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.

Vaccination rates among skilled nursing facilities’ workers continue to lag optimistic expectations. About 56% of all healthcare personnel have been fully vaccinated for the week ending June 27 vs. 79% of residents fully vaccinated, according to the most recent CMS data compiled by NIC’s Skilled Nursing COVID-19 Tracker. The reluctance among staff to get vaccinated is worrisome as the Delta variant becomes more dominant and COVID-19 cases rise among the general population across states with low vaccination coverage.

Now is the time to remember how devastating and tiring the battle against COVID was for skilled nursing facilities, particularly for frontline workers.

Exhibit 1 below shows that for the week ending June 27, about 69% of skilled nursing facilities have reported vaccination data to CMS. Regionally, the highest rate of fully vaccinated residents in skilled nursing facilities reporting vaccination data to CMS was seen in the Northeast at 82.4%, followed by the Midwest (80.8%), the West (78.5%), and then the South (75.2%). For healthcare workers, the highest rate was seen in the West and Northeast at 62.7% and 62.3%, respectively, while the lowest rate was seen in the South at 50.3%.

There seems to be a correlation between the rise of cases and regions with low vaccination rates. For instance, the South region, where vaccination rates among staff are relatively lower, reported the highest case count of newly confirmed cases among staff. The South is the only region that reported an increase in cases among staff week-over-week, up of 17%, from 190 confirmed cases on June 20 to 222 on June 27.

Exhibit 1 – Vaccination rates within skilled nursing facilities – By region.

Drilling deeper into states, Exhibit 2 below shows that 27 states reached a vaccination rate among skilled nursing residents above 80%, while 26 states had a vaccination rate among staff below 60%. Vermont has the highest percentage of its skilled nursing patients fully vaccinated against COVID-19 at 95%. Other states with a vaccination rate among skilled nursing residents of 90% or above include New Hampshire, Maine, North Dakota, Iowa, and Nebraska.

Separately, case trends among the general population in Alabama are concerning. According to data from the CDC compiled by NIC’s Skilled Nursing COVID-19 Tracker, weekly confirmed cases increased by 123% from 644 on June 20 to 1,438 on June 27, the highest increase seen week-over-week. Notably, Alabama has the lowest vaccination rate among the general population, only 33.3% of the population are fully vaccinated as of July 11.

Despite the increasing case rates in the general population, skilled nursing facilities in Alabama continued to be safe, reporting two cases among residents and seven cases among staff on June 27. About 79% of skilled nursing residents and 49% of staff are fully vaccinated in the state.

Exhibit 2 – Vaccination rates among skilled nursing patients and staff – By state and territory.

In summary, weekly COVID-19 cases among skilled nursing patients are at the lowest level since the onset of COVID-19 and continue to trend lower or flatten with relatively small increases across a few states. Additionally, 99% of skilled nursing facilities reported no new COVID-19 cases among residents for the week ending June 27. Cases among staff are up slightly for the first time since mid-April, up 3% from 492 cases on June 20 to 509 on June 27. Data continue to suggest that vaccines are still effective, but it is important to note that over 20% of skilled nursing staff have declined a COVID vaccine. The vaccine hesitancy and reluctance among staff may lead to Delta variant pockets with severe cases in some parts of the country.

As a backdrop, Israel began administering a third dose of the Pfizer vaccine to provide coronavirus booster shots and raise antibody levels among at-risk adults. While healthcare officials in the U.S. haven’t made a statement about a third shot yet, skilled nursing facilities need to be prepared in case infection rates and hospitalizations rise among vaccinated residents.

To gain in-depth insights and track vaccination rates and the week-over-week change rate for new resident cases and fatalities of COVID-19 within skilled nursing facilities at the state and county levels, visit NIC.org. You can also access the Skilled Nursing COVID-19 Tracker along with a rich trove of analysis and insight on the NIC COVID-19 Resource Center.

NIC MAP^® Data Service, powered by NIC MAP Vision, an affiliate of NIC, released its latest Skilled Nursing Monthly Report on July 1, 2021, which includes key monthly data points from January 2012 through April 2021.

Here are some key takeaways from the report:

The upward trend in skilled nursing occupancy continued in April. Occupancy increased for the third month in a row, rising 94 basis points from March to end April at 73.2%. Occupancy is now up 185 basis points from the 71.3% low point reached in January. There is optimism that occupancy will continue to increase through 2021 as vaccinations continue around the country and as elective surgeries rise, thereby supporting admissions to skilled nursing properties. However, occupancy still is very low relative to pre-pandemic levels and cash flow is a concern at some properties. Occupancy is down 12.3 percentage points from the pre-pandemic February 2020 level of 85.5%.

Managed Medicare revenue mix decreased 30 basis points to 10.8% from March to April. However, it has increased 159 basis points since the end of 2020 (9.2%) and it is up 245 basis points since the pandemic low of 8.3% set back in May 2020 when many elective surgeries were still suspended and significant restrictions to admissions were in place across the country. This revenue mix trend, along with recent increased occupancy, suggests that managed Medicare admissions have been increasing. Compared to one year ago, managed Medicare revenue mix is up 225 basis points from 8.5%.

Medicare patient day mix decreased 40 basis points to 12.0% in April from March and is down 358 basis points from the 12-month high of 15.6% reached in December 2020. In addition, and a similar trend to patient day mix, Medicare revenue mix decreased 41 basis points from March to end April at 21.1% and is down 4.2 percentage points from the 12-month high of 25.2% reached in January 2021. This decline suggests that as resident cases of COVID-19 have declined, there have been fewer patients converted from Medicaid to Medicare, which was helpful when cases among residents were elevated as CMS waived the 3-Day Rule requiring a new 3-day inpatient hospital stay.

Medicaid revenue mix increased 85 basis points from March, ending April at 50.0%. Medicaid revenue mix was 46.7% in December 2020, representing a time-series low. This was due to factors such as CMS waiving the 3-Day Rule and lower Medicaid days overall due to lower admissions. It has since increased 326 basis points. However, it is still down 449 basis points from one year ago (54.5%). Medicaid days are expected to increase as occupancy continues to increase during 2021.

To get more trends from the latest data you can download the Skilled Nursing Monthly Report here. 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 at https://www.nic.org/skilled-nursing-data-initiative. 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, and about accessing the data featured in this article, schedule a meeting with a product expert today.