Senior Housing Occupancy at 83%: Six Quarters of Uninterrupted Gains

Demand, as measured by the change in occupied units, continued to largely outpace new supply in fourth quarter 2022.

Senior Housing Occupied Stock Surpasses Pre-Pandemic Level and is Now at its Highest Level Since NIC Began Reporting the Data in 2005.

According to quarterly NIC MAP^® data released by NIC MAP Vision, demand, as measured by the change in occupied units, continued to largely outpace new supply in fourth quarter 2022, marking its seventh consecutive quarter of positive increases, with a net absorption gain from the prior quarter of more than 8,600 units, or 1.5% for the NIC MAP Primary Markets. From its pandemic low in the first quarter of 2021, senior housing occupied stock increased by about 52,200 units and is now above its pre-pandemic 1Q 2020 level. Notably, it took seven quarters to fully recover all the senior housing units vacated during the first four quarters of the pandemic.

As a result of supply/demand trends, the all-occupancy rate for senior housing for the NIC MAP Primary Markets increased for the sixth consecutive quarter to 83.0% in the December 2022 reporting period, up 0.9 percentage point (pps) from the September 2022 reporting period on three-month rolling basis, with a small gain of 0.1pps from November 2022. From its time series low of 77.8% in June 2021 and after six quarters of positive momentum and consistency—the longest period of uninterrupted quarterly gains since 2012—occupancy increased by 5.2pps but remained 4.1pps below pre-pandemic March 2020 levels of 87.1%.

By Majority Property Type. At 85.2%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets increased 0.6pps from September 2022, with a gain of 0.2pps from November 2022. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets was up 1.1pps to 80.7% from September 2022. Occupancy for both independent living properties and assisted living properties remained 4.4pps and 3.9pps below March 2020 levels, respectively.

Notably, the 4.5pps difference between occupancy for majority independent living properties and majority assisted living properties was the smallest since 2018.

The inventory of majority independent living properties for the NIC MAP Primary Markets increased by 1.7% or 5,822 units from year-earlier levels in the December 2022 reporting period. This was the largest annual growth in the last 12 months. AL inventory increased by 1.5% over this same period.

All-occupancy increased or remained stable in 24 of the 31 Primary Markets for IL in the December 2022 reporting period compared with September 2022. At 84.9%, Denver saw the largest quarterly improvement in December 2022, up 2.3pps from September 2022. San Diego IL occupancy fell 1.1pps in December 2022 to 86.5%. San Diego had the second largest quarterly decline among the 31 NIC MAP Primary Markets.

All-occupancy rose or remained stable in 29 of the 31 Primary Markets for AL in December 2022 compared with September 2022. At 78.6%, Pittsburgh occupancy saw the largest increase since September 2022 and gained 3.3pps quarter-to-quarter. San Francisco’s occupancy edged up from November 2022 but fell by 0.8pps from September 2022 to 82.5%. San Francisco had the largest quarterly decline among the Primary Markets.

Keep track of the most timely comprehensive review of the sector’s market fundamentals and trends. The NIC Intra-Quarterly Snapshot monthly publication, available for complimentary download on our website, continues to provide a powerful and closely watched means to stay ahead of industry trends, even as senior housing markets sustain a fast pace of evolution and adaptation, amidst an apparent recovery. 

The January 2023 IQ Snapshot report will be released on nic.org on Thursday, February 9, 2023, at 4:30pm.

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

Asking Rate Growth Remains High: Key Takeaways from the 3Q2022 NIC MAP Vision Actual Rates Report

Data from the recently released 3Q2022 NIC MAP Vision® Actual Rates Report showed growth for asking rates remained high on a year-over-year basis.

Data from the recently released 3Q2022 NIC MAP Vision Actual Rates Report showed growth for asking rates remained high on a year-over-year basis for all three care segments (independent living, assisted living, and memory care) for the data contributors to this data collection. In the recently released report, monthly data of actual rates and leasing velocity are presented through September 2022, including data on rate discounting and move-in/move-out trends. Key takeaways from the report, specifically from the Segment Type report, are presented below. 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

- The year-over-year growth in all rates for all care segments remained relatively strong through September 2022.
  - For memory care, initial rates were up by 10.2% from year-earlier levels in September. This was the largest increase since the time series began (except for April 2022) among the three tracked rate categories (in-place, asking, and initial/move-in).
  - At 9.9% in September, year-over-year asking rate growth for the independent living care segment was at its strongest pace since NIC MAP began reporting the data.
- For the past 19 months (since March 2021), the pace of move-ins has exceeded that of move-outs for all three care segments (independent living, assisted living, memory care).
  - The memory care segment had the highest pace of move-ins of the three care segments in the third quarter at 3.6% of inventory on average. This was down from the recorded high of 4.6% of inventory in March of 2021, however.
  - The weakest pace of churn was in independent living, where the pace of move-ins was at 2.3% of inventory in the third quarter. This compared favorably with a move-out rate of 2.1% of inventory, however, and supported gains in occupancy.
- Move-ins for assisted living segments averaged 3.5% of inventory in the third quarter, down from the recorded high of 3.9% in June 2021, but still relatively strong.
- Discounts are generally waning in the memory care and assisted living care segments.

Additional key takeaways are available to NIC MAP Vision subscribers in the full report.

NIC MAP Vision continues to work to onboard new data contributors and is dedicated to reporting more metros. It is only with the support of Actual Rates data contributors and officially certified Actual Rates software partners that expanded metro-level reporting is now available. For more information on which metropolitan markets are now available to NIC MAP Vision subscribers, please contact a product expert at NIC MAP Vision today.

About the Report

The NIC MAP Vision^® 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 senior 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 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

Interested in Participating?

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

Operators contributing data to the 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.

Visit NIC Map Vision’s website for more information.

Providing “Purposeful Longevity” for Senior Housing Residents Through Healthcare Integration

NIC co-founder and strategic advisor Bob Kramer joined a panel with the Milken Institute to discuss innovative models that integrate housing & healthcare.

NIC co-founder and strategic advisor Bob Kramer joined a panel hosted by the Milken Institute to discuss innovative models that integrate housing and healthcare, enabling older adults to thrive.

A new generation of senior housing residents are determined to live with “purposeful longevity”— a greater sense of purpose and connectivity to their own interests and those of the community they live in. Healthy living and overall wellness provide the foundation for purposeful longevity, and senior living providers have an obligation to make it a reality for their residents.

Bob Kramer, NIC co-founder and founder of Nexus Insights, recently participated in a panel hosted by the Milken Institute at its Future of Healthcare Summit. Alongside other leaders in housing and connected health services, Kramer discussed how senior housing and healthcare can integrate to provide the sense of purposeful longevity that residents desire. Kramer and the panelists covered how healthcare for older adults continues to migrate out of hospitals and into private residences, as this population prefers to age in their own homes but requires designated in-home care services to do so. That’s why affordable housing and connected health services are the two most critical policy interventions that local leaders must prioritize before 2030, according to the panel and a new Milken Institute survey.

The Milken Institute’s summit offers a glimpse into the kinds of discussions and topics coming up at the 2023 NIC Spring Conference. The conference will dive into how senior housing and healthcare leaders are “Partnering for the Future” to provide better outcomes for older adults.

Kramer highlighted that for integration to be successful, senior housing providers and policymakers must recognize the “forgotten middle,” those who do not qualify for Medicaid but cannot afford private-pay senior housing. The number of middle-income seniors will nearly double to 14.4 million by 2029 and over half of them will not be able to afford assisted living, according to the original NIC-funded study conducted by NORC at the University of Chicago. Reaching people with preventive, person-centered and affordable healthcare will be key for senior living facilities to reach this population, and while funding and reimbursement challenges remain, there are several value-based models that show promise.

Kramer noted that senior living must take a new approach to how it provides care for residents and improves health outcomes, which should focus on the priorities that matter most to the individual. This requires understanding how wellness can help residents accomplish the things they want to do with their lives. Paired with the growth of data and analytics to drive better health outcomes, Kramer believes this approach will allow senior living facilities to provide the best care for residents.

Now is the time for senior housing and healthcare organizations to consider how to work together to provide the new generation of senior living residents with purposeful longevity. Watch the panel discussion from Milken Institute’s Future of Healthcare Summit to learn more.

To continue the discussion on the role of senior housing in healthcare and how all stakeholders—from operators to capital providers, to payers—can work together to improve the well-being of older adults, join other healthcare and senior living leaders in San Diego this March.

October Skilled Nursing Occupancy Rate at Highest Level Since April 2020

The occupancy rate for skilled nursing properties increased throughout 2022. However, labor continues to be a significant challenge within the industry.

“The occupancy rate for skilled nursing properties increased throughout 2022. However, labor continues to be a significant challenge within the industry and some operators are unable to admit new patients due to staffing shortages.”

-Bill Kauffman

NIC MAP Vision released its latest Skilled Nursing Monthly Report on December 29, 2022. The report includes key monthly data points from January 2012 through October 2022.
Here are some key takeaways from the report:

The skilled nursing occupancy rate in October recovered the ground it lost in September and rose 53 basis points to 79.4%, its highest level since April 2020. More broadly, there has been positive momentum throughout 2021 and 2022 and the occupancy rate was up nearly six percentage points (598 basis points) since its low point (73.4%) reached in January 2021. However, a rise in COVID-19 cases last year slowed some of the initial momentum. In addition, the staffing crisis in the sector was still a significant burden on skilled nursing operators and limited the ability to accept new patients in some situations. Occupancy was still down 8.2 percentage points from the pre-pandemic February 2020 level of 87.6%. As staffing and wage growth pressures persist, operations for many operators will be under pressure but the long-term demand for skilled nursing services is expected to grow over time. Hence, finding solutions to staffing shortages is a priority.

Managed Medicare revenue per patient day (RPPD) increased slightly in October but was down 1.4% from year-earlier levels and 4.7% from October 2020. Some operators see opportunity to capture patient volume with the growth of managed care, depending on the operator’s business model. However, the continued decline in managed Medicare revenue per patient day can pose a challenge to operators as the reimbursement differential between Medicare fee-for-service and managed Medicare has increased during the past two years. Medicare fee-for-service RPPD ended October 2022 at $583 and managed Medicare ended at $465, representing a $118 differential. In October of 2020, the differential was $100.

Medicare revenue mix nudged up slightly from September to end October at 21.4% but was down from its pandemic high of 24.6% set in February 2022. It is down from earlier in the year (January/February) when increased cases of COVID-19 resulted in additional need for the utilization of the 3-Day rule waiver thereby increasing the Medicare census instead of transferring patients to hospitals. Meanwhile, Medicare revenue per patient day (RPPD) increased from $570 in September to $583 in October. Most of this monthly change is likely a result of the increase in Medicare rates to skilled nursing properties for fiscal year 2023. However, it is down from the high this year set in January most likely due to less reimbursement needed for COVID-19 positive patients.

Medicaid patient day mix held steady ending October at 64.8%. However, it has increased 269 basis points from the pandemic low of 62.1% set in February 2022. In addition, Medicaid revenue mix declined 29 basis points from the prior month, ending October at 51.3%. Medicaid revenue mix is up from earlier in the year (January/February) as patients have now moved from Medicare patient days back to Medicaid, after utilizing the 3-Day Rule waiver. Meanwhile, Medicaid RPPD increased 1.1% from $260 in September to end October at $263. It is up 0.5% from one year ago.

To get more trends from the latest data you can 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 to provide data at localized levels in the future. Operators who are interested in participating can complete a participation form on our website. NIC maintains strict confidentiality of all data it receives.

Secondary Markets’ Recovery Driven by Demand & New Supply

This commentary drills deep into recent performance of the Secondary Markets, examining the overall performance and composition of the Secondary Markets.

This commentary drills deep into recent performance of the Secondary Markets, examining the overall performance and composition of the Secondary Markets in aggregate and in comparison to the Primary Markets.

The Secondary Markets tracked by NIC MAP Vision have benefited in recent quarters from recovering strength in demand with limited new supply, driving occupancy closer to pre-pandemic levels for the Secondary Markets than that of the Primary Markets. New Orleans, LA (up 13.6%); Knoxville, TN (up 12.4%); and Baton Rouge, LA (up 12.2%), in particular, stand out as markets that have recovered the most following occupancy declines during the pandemic. All three markets were already experiencing negative absorption before the onset of the pandemic, and the health care crisis accelerated this trend. Absorption turned positive in these markets more recently, and the limited new supply arriving online drove occupancy to rebound.