Executive Survey Insights | Wave 15: October 26 to November 8, 2020

This NIC Executive Survey Insights Wave 15 survey includes responses collected October 26-November 8, 2020 from owners and executives of 64 seniors housing and skilled nursing operators from across the nation.

by Lana Peck  / November 12, 2020

COVID-19 • Blog

“A key underlying theme that can be derived from looking at the findings of the Wave 15 NIC Executive Insights survey as a whole is uncertainty. Uncertainty around the need for seniors housing and care operators to use temporary and agency staff, ability to grow NOI amid rising costs of labor and PPE, the pace of sales in light of consumer concerns about being able to visit loved ones, and the direction of record low occupancy rates. When (and how) life as we knew it will settle into a new normal are all being driven by the durability of the pandemic.”      –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 at a time when market conditions continue to change. This Wave 15 survey includes responses collected October 26-November 8, 2020 from owners and executives of 64 seniors housing and skilled nursing operators from across the nation. Detailed reports for each “wave” of the survey can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights.

 Wave 15 Summary of Insights and Findings

  • Staffing is a growing challenge for many operators. More than two-thirds of respondents are using agency or temp staff to fill vacancies—70% up from 36% in Wave 3. Although down slightly from Wave 14, most respondents are continuing to pay staff overtime hours, putting ongoing strain on NOI. While fewer organizations in Wave 15 than earlier in the pandemic continue to allow staff to work remotely and offer paid sick leave, three-quarters are still offering flexible work hours.
  • In Wave 15, similar shares of organizations with independent living units, assisted living units and/or nursing care beds reported roughly equal proportions of increases or decreases in month-over-month occupancy changes.
  • The use of rent concessions may be providing some support to occupancy rates as month-over-month seniors housing care segment occupancy changes in Waves 14 and 15 trended higher than prior in waves of the survey. Between 62% and 69% of organizations with any independent living units, assisted living units and/or memory care beds reported offering rent concessions. Fewer organizations with any nursing care beds reported offering rent concessions (43%).
  • The shares of organizations with assisted living units reporting increased month-over-month occupancy is the highest in the survey time series (42%). Just under one-half of organizations with memory care units (45%), 40% with nursing care beds, and roughly one-third with independent living units (30%) noted upward changes in occupancy rates in the past 30-days. Regarding the change in occupancy from one week ago, between two-thirds and three-quarters of organizations (63% to 79%) reported no change.
  • The shares of organizations reporting no change in the pace of move-ins and move-outs in the past 30-days for the independent living, assisted living and memory care segments remained high in Wave 15 (between 49% and 52%). That said, while smaller in proportion, the shares of organizations reporting accelerations in move-ins outpaced decelerations in the independent living, assisted living and memory care segments. However, the nursing care segment had the largest share of organizations reporting both a deceleration in the pace of move-ins and acceleration in the pace of move-outs in the past 30-days.
  • The share of organizations citing increased resident demand as a reason for acceleration in move-ins in Wave 15 also remained high. Organizations citing hospital placement in Wave 15 (29%) is up from a low of 13% in Wave 12 and down from a high of 41% in Wave 10. Resident or family member concerns was cited most frequently as a reason for deceleration in move-ins and reached the highest point in the survey time series (88%), followed by slowdown in leads conversions/sales (75%). Interestingly, there appears to be a relationship between these two primary reasons.
  • Respondents citing an organization-imposed ban as a reason for deceleration in move-ins increased from 0% in Wave 14 to 17% in Wave 15. While still a small percentage, about one in five respondents (19%) indicated their organizations were increasing move-in restrictions in one or more of their properties. This is up from an average of 7% in Waves 11 through 14 (surveyed early August to the end of October).
  • One-third of organizations with nursing care beds (33%) reported an acceleration in the pace of move-outs. This was the largest share since the Wave 5 surveyed in late April to early May.
  • Three-quarters of organizations (77%) reporting acceleration in move-outs cited resident deaths (reason unspecified), which was up from 61% in Wave 13. Resident or family member concerns declined from 52% in Wave 13 to 45% in Wave 15, followed by residents moving to higher levels of care (41%).
  • Accurate and timely testing (within 48 hours) and access to PPE is crucial for operators to keep residents safe from contagion and grow occupancy. Over one-half of respondents find it easy to obtain COVID-19 test kits and PPE. A significant improvement since the late summer months, more than one-half of respondents (56%), received their COVID-19 test results within 2 days, up from 13% in Wave 10, surveyed late July to early August.
  • About one-quarter of organizations (24%)—more than in the Wave 10 survey (13%) and similar to the Wave 3 survey (27%)—expect their development pipelines to decrease. The reason cited by all of the respondents was uncertainty.

Wave 15 Survey Demographics

  • Responses were collected October 26-November 8, 2020 from owners and executives of 64 seniors housing and skilled nursing operators from across the nation. Half of respondents are exclusively for-profit providers (52%), one-third (33%) are exclusively nonprofit providers, and 15% operate both for-profit and nonprofit seniors housing and care organizations.
  • Owner/operators with 1 to 10 properties comprise 56% of the sample. Operators with 11 to 25 properties make up 24% of the sample, while operators with 26 properties or more make up 20% of the sample.
  • 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), 33% operate nursing care properties, and 33% operate CCRCs (aka Life Plan Communities).

Key Survey Results

Pace of Move-Ins and Move-Outs

Respondents were asked: “Considering my organization’s entire portfolio of properties, overall, the pace of move-ins and move-outs by care segment in the past 30-days has…”

  • Showing the most recent waves of survey data in the chart below, the shares of organizations reporting no change in the pace of move-ins in the past 30-days remained high for the independent living, assisted living and memory care segments (ranging from 49% to 52%).
  • Between one-quarter and one-third of organizations (25% to 34%) with independent living, assisted living and/or memory care units, and 19% of organizations with nursing care beds reported accelerations in the pace of move-ins. Accelerations outpaced decelerations in assisted living and memory care. The nursing care segment had the largest share of organizations reporting declaration in move-ins.
  • Wave 15, the smallest shares of organizations with independent living units and/or nursing care beds reported accelerations in the pace of move-ins, and the largest shares of organizations with nursing care beds reported decelerations in the pace of move-ins since Wave 8 (surveyed at the end of May to early June).

Reasons for Acceleration or Deceleration in Move-Ins

Respondents were asked: “The acceleration/deceleration in move-ins is due to…”

    • The share of organizations citing increased resident demand as a reason for acceleration in move-ins in Wave 15 remained high (71%); up from a low of 66% in Wave 10 (surveyed mid-July to early-August) but down from a peak of 88% in Wave 12 (surveyed mid- to late-September). Organizations citing hospital placement in Wave 15 (29%) is up from a low of 13% in Wave 12 and down from a high of 41% in Wave 10.

  • Resident or family member concerns cited as a reason for deceleration in move-ins in the past 30-days reached the highest point in the survey time series (88%), followed by slowdown in leads conversions/sales (75%). Interestingly, there appears to be a relationship between these two primary reasons.
  • While government-imposed ban cited as a reason for deceleration in move-ins remained steady from the prior wave (25%), respondents citing organization-imposed ban increased from 0% in Wave 14 to 17% in Wave 15.

  • Between two-thirds and three-quarters of organizations in Wave 15 (63% to 76%) with independent living, assisted living, and/or memory care units note no change in the pace of move-outs in the past 30-days. While greater shares of organizations with independent living units reported deceleration in move-outs than in the prior three waves of the survey (20%), greater shares of organizations with assisted living units reported acceleration in move-outs than in the prior two waves (24%).
  • One-third of organizations with nursing care beds (33%) reported an acceleration in the pace of move-outs. This was the largest share since the Wave 5 surveyed in late-April to early-May.

  • Resident deaths (unspecified reason) were cited most frequently as a reason for acceleration in move-outs (77%). This is up from 61% in Wave 13. Resident or family member concerns declined from 52% in Wave 13 to 45% in Wave 15, followed by residents moving to higher levels of care (41%).

Change in Occupancy by Care Segment

Respondents were asked: “Considering the entire portfolio of properties, overall, my organization’s occupancy rates by care segment are… (Most Recent Occupancy, Occupancy One Month Ago, Occupancy One Week Ago, Percent 0-100)”

  • The shares of organizations with assisted living units reporting increased occupancy is the highest in the survey time series (42%). Just under one-half of organizations with memory care units (45%), 40% with nursing care beds, and roughly one-third with independent living units (30%) noted upward changes in occupancy rates in the past 30-days.
  • In Wave 15, similar shares of organizations with independent living units, assisted living units and/or nursing care beds reported roughly equal proportions of increases or decreases in month-over-month occupancy changes.

  • Regarding the change in occupancy from one week ago, between two-thirds and three-quarters (63% to 79%) of organizations reported no change. Among organizations with nursing care beds, slightly more reported declines than increases (23% vs. 13%). Occupancy increases were reported in similar proportions to the prior wave by organizations with independent living and/or assisted living units. There were no organizations with memory care units reporting declines in week-over-week occupancy.

Organizations Currently Offering Rent Concessions to Attract New Residents and Organizations Experiencing a Backlog of Residents Waiting to Move-In

Respondents were asked: “My organization is currently offering rent concessions to attract new residents,” and “My organization is experiencing a backlog of residents waiting to move-in”

    • More than one-half of respondents in Wave 15 (57%) were offering rent concessions to attract new residents. Organizations offering rent concessions has been above 50% in the survey since mid-September.

  • Of the organizations that operate any independent living and/or memory care units (including a combination of other seniors housing and care segments), around two-thirds (69% and 64%, respectively) indicated they were currently offering rent concessions, followed by 62% of organizations with any assisted living units, and fewer than half of organizations with any nursing care beds (43%).
  • Separately, in NIC’s 2Q 2020 Actual Rates Report, the average discount for assisted living care units averaged 4.4% ($226) below average asking rates. This equates to an average initial rate discount of 0.5 month on an annualized basis. Learn More About the Actual Rates Initiative.
  • Approximately one-quarter of respondents (26%) indicate that their organizations have a backlog of residents waiting to move in. This has remained steady since Wave 12 surveyed mid- to late September.

Improvement in Access to PPE and COVID-19 Testing Kits

Respondents were asked: “Considering access to PPE (personal protective equipment) and COVID-19 testing kits, my organization has experienced that access has improved… Very little, it is still difficult to obtain enough PPE/testing kits in most markets/Somewhat, in some markets it is easier to obtain PPE/testing kits than in others/Considerably, we typically have no difficulty obtaining PPE/testing kits, regardless of market”

  • While there’s been some improvement in recent waves of the survey, just over one-half of respondents find it easy to obtain COVID-19 test kits. Respondents reporting easy access to PPE remains roughly one-half.

Time Frames for Receiving Back COVID-19 Test Results

Respondents were asked: “Regarding COVID-19 test results (either for staff, residents or prospective residents) results typically come back within…”

  • More than one-half of respondents (56%), received their COVID-19 test results within 2 days, up from 13% in Wave 10, surveyed late-July to early-August. Nearly all respondents (97%) received test results within 5 days.

Labor and Staffing

Respondents were asked: “My organization is backfilling property staffing shortages by utilizing … (Choose all that apply).” Note: this question was asked in Wave 3, and then again in Waves 10-14.

  • In Wave 15, more than two-thirds of respondents are using agency or temp staff to fill staffing vacancies—70% up from 36% in Wave 3. Although down slightly from Wave 14, most respondents (81%) are continuing to offer staff overtime hours.

 Supporting Property Staff

Respondents were asked: “My organization is supporting property staff who may be experiencing challenges by providing… (Choose all that apply)” Note: this question was asked only in the three survey time periods shown in the chart.

  • While fewer organizations in Wave 15 than earlier in the pandemic continue to allow staff to work remotely, three-quarters are still offering flexible work hours (78%). Additionally, fewer are offering additional paid sick leave.

Development Pipeline Considerations

Respondents were asked: “My organization’s projected development pipeline going forward is expected to… (Choose all that apply)” Note: this question was asked only in the three survey time periods shown in the chart.

  • About one-quarter of respondents (24%)—more than in the Wave 10 survey (13%) and similar to the Wave 3 survey (27%)—expect their development pipelines to decrease. The reason cited by all of the respondents was uncertainty.
  • One in five organizations in Wave 15 (20%) expect their development pipelines to increase. Reasons respondents cited for increase included lower interest rates, planned projects continuing to make progress, growth opportunities in the market, and favorable acquisition pricing.

Owners and C-suite executives of seniors housing and care properties, we’re asking for your input! By providing real-time insights to the longest running pulse of the industry survey you can help ensure the narrative on the seniors housing and care sector is accurate. By demonstrating transparency, you can help build trust.

“…a closely watched Covid-19-related weekly survey of…operators
conducted by the National Investment Center for Seniors Housing & Care…”
The Wall Street Journal | June 30, 2020

The Wave 16 survey is available until Sunday, November 22, and takes just 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 click this link or send a message to insight@nic.org to be added to the email distribution list.

 

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and transparency into market fundamentals in the seniors housing and care space at a time where trends are continuing to change.