“Single-site operators and those with between two and nine properties were more likely to be considering product diversification, with single-site operators favoring lower acuity settings (36%) and those with between two and nine properties equally considering lower acuity (20%) and higher acuity settings (20%).

With regards to expected changes to various care segments in their portfolio of properties, approximately half of respondents expect to increase the active adult (age 55+) and independent living care segments, while just under one-half (45% and 41%) anticipate increases in their assisted living and memory care segments.

When asked about the contributing factors to the acceleration of move-outs, operators cite residents moving to higher levels of care as the leading cause (45%), followed by deaths (35%), resident and family member concerns (10%), natural disasters (5%), and current economic conditions (5%).”

–Ryan Brooks, Senior Principal, NIC

This Wave 47 survey includes responses from October 17 to November 13, 2022, from owners and executives of 46 small, medium, and large senior housing and skilled nursing operators across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties. More 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.

In the Wave 47 survey, reflecting operator experiences in October and November 2022, survey respondents were asked about their considerations on diversifying and expanding their product offering into higher acuity or lower acuity settings. Single-site operators and those with between two and nine properties were more likely to be considering product diversification, with single-site operators favoring lower acuity settings (36%) and those with between two and nine properties equally considering lower acuity (20%) and higher acuity settings (20%).

Larger operators were less likely to be considering product diversification, as three-quarters of those with 10 to 25 properties (77%) and those with 26 or more properties (78%) were not considering diversifying their offerings.

Respondents were also asked whether their organization expected to increase or decrease specific care segments in their portfolio of properties over the next 12 months. Approximately half (53% and 49%) of respondents expect to increase the active adult (age 55+) and independent living care segments, while just under one-half (45% and 41%) anticipate increases in their assisted living and memory care segments.

Short stay/rehab and nursing care were the only care segments with survey respondents reporting expected decreases in their portfolio of properties over the next 12 months. One-quarter (24%) of respondents anticipate decreasing nursing care and one-tenth (11%) anticipate decreasing short stay/rehab within their portfolio of properties.

The share of operators reporting a deceleration in the pace of move-ins in the past 30 days went up for independent living operators (26%) but fell for nursing care operators (6%). This marks the fifth consecutive wave with an increase in independent living operators reporting a deceleration in the pace of move-ins. For nursing care, it is the third consecutive wave with a decline in the rate of operators reporting a deceleration in the pace of move-ins. The share of assisted living (14%) and memory care operators (16%) reporting a deceleration in the pace of move-ins remained stable compared to the previous wave.

Of respondents indicating a deceleration in the pace of move-ins, 80% indicate the deceleration is a result of a slowdown in leads conversions or sales. Accounting for the remaining 20% are resident or family member concerns, routine seasonality, and natural disasters.

Wave 47 Survey Demographics

• Responses were collected between October 17 and November 13, 2022, from owners and executives of 46 senior housing and skilled nursing operators across the nation.
• Owners/operators with 1 to 10 properties comprise roughly one-half of the sample (52%). Operators with 11 to 25 properties account for 28%, and operators with 26 properties or more make up the rest of the sample with 20%.
• More than one-half of respondents are exclusively for-profit providers (59%), one-third operate not-for-profit seniors housing and care properties (37%), and 4% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, three-quarters (74%) of the organizations operate seniors housing properties (IL, AL, MC), 17% operate nursing care properties, and 30% operate CCRCs – also known as life plan communities.

This is your survey! Owners and C-suite executives of seniors housing and care properties, please help us tell an accurate story about our industry’s performance. The ESI 2022 questionnaire has been shortened from prior surveys. While some standard questions will remain for tracking purposes, in each new survey wave, new questions can be added based on respondents’ suggestions.

Wave 48 of the ESI is now live and new questions have been added. The current survey is available and takes 12 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 Ryan Brooks at rbrooks@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 provide the broader market with a sense of the evolving landscape as we recover from the pandemic.

The all-occupancy rate for senior housing for the NIC MAP Primary Markets increased to 82.8% in the October 2022 reporting period, up 0.6 percentage point (pps) from the September 2022 reporting period on three-month rolling basis, according to intra-quarterly NIC MAP® data, released by NIC MAP Vision. From its pandemic record low of 77.9% in June 2021, senior housing all-occupancy increased by 4.9pps and is now more than halfway in the road to recovery, with a gap of 4.4pps from the pre-pandemic March 2020 level of 87.2%.

At 85.0%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets increased 0.3pps from September 2022 but remained 4.6pps below March 2020 levels. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets was up 0.7pps to 80.4% from September 2022 but still 4.2pps below March 2020 levels. Occupancy for AL continued to recover relatively fast compared with IL despite the relatively large inventory growth since the onset of the pandemic, but it’s notable that AL also fell further from peak to trough. From its pandemic-related low, all-occupancy for AL increased by 6.3pps, nearly 3pps more than IL (up 3.4pps since March 2021).

The pace of year-over-year inventory growth for both IL and AL continued to be relatively slow compared with pre-pandemic levels. The inventory of majority independent living properties for the NIC MAP Primary Markets increased by 1.1% or 3,887 units from year-earlier levels in the October 2022 reporting period. This was the smallest annual growth since 2015. Assisted living inventory increased by 2.0% over this same period.

All-occupancy rates increased or remained stable in 24 of the 31 Primary Markets for IL in the October 2022 reporting period compared with September 2022. At 93.5%, Boston’s occupancy increased by 0.7pps from September 2022 and ranked the highest among the 31 NIC MAP Primary Markets. Boston recovered the 6.1pps lost during the height of the pandemic and is the third independent living primary market, on average, to return/exceed pre-pandemic March 2020 levels along with San Antonio and Las Vegas. Houston IL occupancy improved by 2pps from September 2022, the largest gain among the 31 NIC MAP Primary Markets, but at 79.1%, it is still ranked at the bottom of the pack. In fact, Houston is the only IL primary market with an average occupancy rate below 80%.

All-occupancy rates rose or remained stable in 30 of the 31 Primary Markets for assisted living in October 2022 compared with September 2022. Tampa had the highest occupancy rate for AL among the 31 Primary Markets at 86.3% (up 0.9pps from October 2022 and is now 0.8pps below March 2020 levels). The Washington, D,C, occupancy rate at 75.2% in October 2022, is up 0.1pps from September 2022. Washington had the lowest occupancy rate for AL among the 31 Primary Markets.

Interestingly, the metropolitan markets at the bottom of the pack in occupancy rankings, e.g., Houston – IL and Washington, DC – AL had a relatively large year-over-year inventory growth compared with markets ranked first among the 31 NIC MAP Primary Markets, e.g., Boston – IL and Tampa – AL. To learn more about the inventory growth from year-earlier levels across these select NIC MAP metropolitan markets, download the NIC Intra-Quarterly Snapshot.

Keep track of the most timely and 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 November 2022 Intra-Quarterly Snapshot report will be released on nic.org on Thursday, December 10, 2022, at 5:00pm.

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.

NIC Analytics released the 2Q 2022 NIC Lending Trends Report today. The quarterly report, available for free to NIC’s constituents, currently tracks $86.8 billion in senior housing and nursing care loans. The report includes data over five years for construction loans, mini-perm/bridge loans, and permanent loans from 3Q 2016 through 2Q 2022.

Takeaways from the 2Q22 NIC Lending Trends Report

The number of delinquent loans continued to edge lower in second quarter 2022 but remains elevated from pre-Covid levels for senior housing. Senior housing delinquencies fell back to third quarter 2021 levels. The delinquency rate (delinquencies as a share of total loans) for both senior housing and nursing care declined and stood at 1.0% for senior housing and 0.9% for nursing care. Despite this overall improvement in delinquency rates, some foreclosures were reported for the sample in second quarter 2022 for both senior housing and nursing care.

New mini-perm/bridge loans closed for senior housing were up in second quarter 2022 following a sharp decline in first quarter 2022. On a same-store basis, the quarter-over-quarter increase was 27.0% for senior housing. Nursing care mini-perm/bridge loan closings had a second quarter of negative growth with 7.2% decline in first quarter 2022 and 29.7% in second quarter 2022. However, the new mini-perm/bridge loan closing volume for nursing care remained elevated compared with pre-pandemic levels. The heightened mini-perm/bridge loans in combination with the lowered permanent loans suggests: (1) some lenders may currently be more comfortable issuing a mini-perm over permanent loan for some deals, and (2) the need for financing solutions like mini-per/bridge loans to support business operations, in the midst of relatively low occupancy levels in general and high inflation.

For the sample of lenders in the Lending Trends Report, nursing care new construction loan closings hit a new peak in second quarter 2022, the highest level since at least 2016 but still relatively low in comparison to senior housing. The quarter-over-quarter same-store growth for nursing care new construction loan closings was 15.1% in second quarter 2022. Senior housing new construction loan closings continued to increase through the second quarter of 2022 at a growth of 47.1% on a same-store quarter-over-quarter basis. However, the senior housing new construction loan volume closed remained below its recent peak in third quarter 2021.

Looking ahead. These trends may differ later in the 2022 data set as higher interest rates and inflation start to impact loan volumes and construction activities. Notably, in third quarter 2022, construction starts for senior housing and nursing care weakened and showed signs of a looming slowdown, according to NIC MAP Vision data. Additionally, construction spending in the U.S. fell into negative territory with negative 0.6% in July 2022 and negative 0.7% in August 2022, and pending home sales in the U.S. had the largest contraction in September 2022 year-over-year since the start of the pandemic in April of 2020, according to the U.S. Census Bureau. Further, debt market yield spreads continue to remain elevated as investors require additional yield to take more perceived risk due to rising interest rates and inflation.

Note: These data are not to be interpreted as a census of all senior housing and skilled nursing lending activity in the U.S., but rather reflect lending activity from participants included in the survey sample only.

The 3Q2022 NIC Lending Trends Report is scheduled be released in mid-February 2023.

Interested in participating? The NIC Lending Trends Report helps NIC Analytics to deliver on NIC’s mission to enable access and choice by further enhancing transparency of capital market trends in the senior housing and care sectors. We very much appreciate our data contributors. This report would not be possible without them.

If you would like to participate and contribute your data, please contact us at analytics@nic.org. As a courtesy for providing data, data contributors receive this report early before publication on the website. The information provided as part of the survey will be kept strictly confidential. Individual answers will be combined with the answers of all other respondents. Data acquired from this survey will only be reported in the aggregate, and therefore, the resulting aggregated data will not be attributed to you or your company upon distribution.

The U.S. Bureau of Labor Statistics reported that nonfarm payrolls rose by 261,000 in October 2022 and the unemployment rate rose 0.2 percentage point to 3.7%. The October increase was well below the year-to-date average of 407,000 and below the monthly average of 562,000 seen in 2021. The monthly gain paints an image of a still growing, but slowing, labor market. For perspective, in 2019, job gains averaged 164,000 per month. Revisions added 29,000 positions to total payrolls in the previous two months.

Employment in health care rose by 53,000 in October and has increased by an average of 47,000 per month in 2022 compared with 9,000 in 2021. Employment in nursing care facilities was up by 4,100 jobs from last month and 17,800 jobs from year-earlier levels and stood at 1,367,000 positions.

Today’s labor report is not likely to affect the Fed’s view on the economy. It is looking for the job market to slow further and the inflation rate to be tempered before it will adjust its aggressive stance on monetary policy. In his statement on Wednesday, Federal Reserve Chair Jay Powell said “The broader picture is of an overheated labor market where demand substantially exceeds supply …. I don’t see the case for real softening just yet.”

The Federal Reserve raised short-term interest rates for the sixth time this year on Wednesday, November 2nd. This marked the fourth consecutive 0.75 percentage point increase and followed earlier increases in 2022 of lesser amounts. The latest increase pushed the Fed Funds rate to a range of 3.75% to 4.00%, up from 0% at the beginning of the year. The rapid rise in interest rates is the most aggressive pace of monetary policy tightening since the early 1980s and is in response to inflation which remains near a 40-year high by most measures. In its announcement of higher interest rates, Powell said that when the Fed considers future interest rate increases, it “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” This may suggest smaller increases in rates at its final 2022 meeting in December and going into January. But Powell also said that “The (FOMC) Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time …. We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.

In a separate survey conducted by the BLS, the jobless rate rose 0.2 percentage point to 3.7% in October. In September, the jobless rate had once again fallen to its pre-pandemic level of 3.5% seen in February 2020. Both months’ unemployment rates are well below the 14.7% peak seen in April 2020.

Among the major worker groups, the October unemployment rates were 3.4% for adult women, adult men (3.3%), teenagers (11.0%), Whites (3.2%), Hispanics (4.2%), Blacks (5.9%), and Asians (2.9%).

Average hourly earnings for all employees on private nonfarm payrolls rose by $0.12 in October to $32.58. This was a gain of 4.7% from year-earlier levels, still high, but lower than the gain in September (5.0%) and August (5.2%).

The labor force participation rate slipped back to 62.2% in October from 62.3% in September and 62.4% in August and was below the February 2020 level of 63.4%.

Earlier this week, the BLS released its JOLTS report that showed the number of job openings rose to a seasonally adjusted 10.7 million in September from 10.3 million in August. That was below the peak of 11.9 million in March, but still well above their pre-pandemic level in early 2020 when it averaged 7.0 million. This means that there are roughly 1.9 open positions for every person looking for work in September, up from 1.7 in August. The hirings rate did fall according to the JOLTS survey as did the quits rate, indications that the labor market is slowing a bit.

“Occupancy has increased throughout 2022, which suggests demand for skilled nursing is growing. However, retaining adequate staff is still challenging and limits the ability to increase patient admissions.”

-Bill Kauffman

NIC MAP Vision released its latest Skilled Nursing Monthly Report on November 3, 2022. The report includes key monthly data points from January 2012 through August 2022.

Here are some key takeaways from the report:

Skilled nursing occupancy continued to increase in August, rising 48 basis points from July to end the month at 78.8%. This is the highest occupancy rate since April 2020. There has been positive occupancy momentum throughout 2022 and it is up 580 basis points since the low point reached in January 2021 (73.0%). However, COVID-19 cases created additional challenges last year (2021), which slowed some of the initial momentum and the staffing crisis in the sector is still a significant burden on skilled nursing operators. Occupancy remains 8.4 percentage points below the pre-pandemic February 2020 level of 87.2%. As staffing, wage growth, and general inflation 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.

While Medicare revenue mix and the revenue per patient day both increased in August, they are down from earlier in the year. In January and February of 2022, increased cases of COVID-19 resulted in additional need for utilizing the 3-Day rule waiver and per day reimbursement for COVD-19 positive patients. Indeed, Medicare revenue mix ended August at 22.0% but is down from its pandemic high of 24.9% set in February 2022. Medicare RPPD is down 2.9% from its pandemic peak of $590 in June 2020. Meanwhile, Managed Medicare revenue mix was down 15 basis points to 10.4% in August. However, this is 229 basis points above the pandemic low of 8.1% set in May 2020.

Managed Medicare revenue per patient day (RPPD) decreased in August and is down 1.2%% from year-earlier levels. Depending on an operator’s business model, the continued decline in managed Medicare revenue per patient day can pose a challenge as the reimbursement differential between Medicare fee-for-service and managed Medicare has increased during the past two years. However, some operators see opportunity to capture patient volume with the growth of managed care. Medicare fee-for-service RPPD ended August 2022 at $573 and managed Medicare ended at $453, representing a $120 differential. In August of 2020, the differential was $105.

After decreasing slightly in the month of July, Medicaid patient day mix increased 23 basis points ending August at 64.9%. However, it has increased 252 basis points from the pandemic low of 62.4% set in February 2022. Meanwhile, Medicaid revenue mix declined 25 basis points from the prior month, ending August at 50.8%. One element of the Medicaid revenue share of a property’s revenue is RPPD and that declined 0.33% from July. However, it up 0.8% since last year in August 2021.

Get more trends from the latest data by downloading 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.