An In-Depth Analysis of NIC MAP Vision Actual Rates Data

Executive Summary 

Through this in-depth analysis, we hope to shine a spotlight on the relationship between inflation, the pace of growth seen in-place actual rates, demand and occupancy. Actual in-place rates refer to effective rates or the rates that are “actually being paid” to live in senior housing. This is often not the same as the asking or listing rate that may be advertised or listed in a brochure. 

NIC MAP Vision Actual Rates data has been collected for the last eight years with the ongoing aim of NIC to bring greater transparency into the industry. More specifically, this effort has included the collection of rent roll metrics on move-in, in-place and asking rates.  

This blog is separated into three sections: 

• Section 1 provides background on the data collection process and its importance as well as the evolution of the actual rates database.  
• Section 2 looks at the relationship of inflation to in-place rate growth since the onset of the pandemic by specific senior housing care segments, i.e., independent living, assisted living and memory care, and finds distinct patterns of rate growth based on the level of inflation.  
• Section 3 takes a deep dive into actual rates data to uncover property level insights on the pattern of rate growth, occupancy and demand. Notably, this is one of the first in-depth analyses conducted on this data since the launch of the Actual Rates Data Initiative by NIC MAP Vision in 2015. This analysis was conducted using quintiles to examine the distribution of in-place rate growth in December 2022 from year-earlier levels on a same store basis. 

We start with a summary of key findings.   

Unveiling the Key Takeaways 

• Having good data processes in place can be considered as a proxy for better management and performance when evaluating a senior housing property, as well as an indicator of how the sector is evolving on a broader scale.
• The year-over-year pace of growth in in-place rates for all care segments generally stayed moderate and largely aligned with the inflation rate in 2020. However, in the first half of 2022, as inflation reached 40-year highs, senior housing in-place actual rates also rose to record highs from year-earlier levels across all senior housing care segments despite the market’s still relatively low occupancy levels in general. 
• A notable relationship exists between in-place rate increases, demand growth and the pace of occupancy recovery. These relationships differ between independent living care segments (frequently more of a lifestyle choice than need-driven) and assisted living care segments/memory care segments (more of a need-driven than lifestyle choice.
• For the independent living care segments (frequently more of a lifestyle choice than need-driven) the data shows that the stronger the demand, the greater the pace of increases in in-place rates. Notably, annual increases in in-place rates are highly associated with stronger demand and improvements in occupancy rates.
• The relationship is NOT the same for the assisted living care segments and memory care segments – (more need-driven than lifestyle driven). For these segments, the data suggest that there is negative correlation between in-place rate increases and demand growth/occupancy recovery. This means that, as year-over-year in-place rate increases get smaller, there is a stronger demand growth and occupancy recovery, on average.
• Additionally, there is evidence that operators bought occupancy by limiting rent growth. That is, the lowest occupied assisted living and memory care segments were able to generate new demand and grow occupancy faster, but this occurred largely because of minimal or even negative rent growth. And on the other hand, the highest priced assisted living and memory care segments were able to command the most rate growth, maintained relatively stable occupancy, but saw little net new demand.
  
  
• Further, the analysis also highlighted the importance of understanding what current and potential senior housing residents are willing to pay and the potential impact of higher rate increases on the pace of move-ins and move-outs, demand growth, and occupancy recovery—as it pertains to in-place rates.  

Section I – Good Data, Good Management: The Link Between Effective Data Processes and Performance. 

“With data collection, ‘the sooner the better’ is always the best answer.” — Marissa Mayer 

Data powers everything that we do. We live in a data-driven world, which means, without accurate, relevant, and timely data, it is nearly impossible to make informed decisions, evaluate risks and opportunities, understand the context in which we operate, and develop effective business solutions in today’s constantly evolving markets.  

For the senior housing and care sectors, collecting and applying accurate data is as important as ever. That said, it is fair to acknowledge that it is not always an easy task for many senior housing and care providers. Data collection involves both human and technological resources, including well-designed organization structure, data collection and storage infrastructures, and efficient internal processes. Having good data processes in place can be considered a proxy for better management and performance when evaluating a senior housing property, as well as an indicator of how the sector is evolving on a broader scale. 

The Evolution of NIC MAP Vision Actual Rates Data: Is the Senior Housing Sector Meeting the Needs of Today’s Market? 

One of the many strategic initiatives undertaken by NIC and NIC MAP Vision over the years has been the NIC MAP Vision Actual Rates Data Initiative. This has been driven by the need to increase transparency in the senior housing sector to achieve greater parity to data that is available in other real estate property types.  

This strategic initiative provides accurate data on the monthly rates that senior housing residents are specifically paying compared to properties’ asking or listed rates. The dataset includes nearly eight years of data for in-place rates, move-in rates, asking rates, occupancy, and leasing activity, as measured by monthly move-in and move-out velocities from April 2015 through December 2022.  

Each quarter, NIC MAP Vision releases monthly time series of actual rates comprised of end-of-month data for each respective month. The release includes aggregate national data across senior housing property types (i.e., majority independent living and majority assisted living) and senior housing care segments (i.e., independent living, assisted living, and memory care).  

In recent years, the dataset has grown to report the aggregate data for select metropolitan markets at the care segment level (12 markets for the independent living care segment, 22 markets for the assisted living care segment, and 16 markets for the memory care segment) to gain a comprehensive understanding of markets and their actual rates dynamics. This data collection has provided the ability to compare move-in and move-out velocity measures and, importantly, an assessment of discounts and concessions being offered to residents as they move into properties. However, reporting on additional markets relies upon participation rates of the individual market’s senior housing operators.  

Participation from all senior housing providers is key to increasing transparency in the sector and meeting the needs of today’s market. The more accurate data that is collected, the more reliable the conclusions and valuable the insights will be. This not only benefits the industry as a whole, but also individual operators who can use the insights gained from analyzing actual rates data for improved decision-making and better outcomes for all stakeholders involved. 

Section 2 – The Pandemic’s Ripple Effect: Exploring the Connection Between In-Place Rates and Inflation. 

Largely driven by supply shortages for goods, rising energy prices, as well as escalating rents and home prices, inflation, as measured by the year-over-year change in the consumer price index (CPI), increased by 9.1% in June 2022, the highest rate in four decades. Subsequently, and following a year of aggressive interest rate hikes by the Federal Reserve to control inflation, the annual inflation rate in the U.S. slowed for a sixth straight month to 6.5% in December 2022, down 2.6 percentage points from the highs seen in June 2022 (9.1%). In January 2023, the annual inflation rate inched lower and stood at 6.4%. 

Despite this recent deceleration in price increases, it remains difficult to say if and when inflation will meet the Fed’s 2% inflation target. However, following a series of 0.75 percentage points increases in the federal funds rate by the Fed, the 0.25 percentage points increase in the federal funds rate at the last FOMC meeting in February 2023 suggests that the Fed may be a bit less fearful of accelerating inflation and moving toward a less tight monetary policy stance.  

The next section of this article explores the relationship of in-place rates to inflation. In-place rates are for those residents already living within a property and often adjust annually to take into account rising costs of goods and the provision of care services. The in-place residents generally make up the majority of residents in a stabilized property.  

Year-over-Year In-Place Rate Growth and Pre-inflationary Times 

Exhibit 1 compares this pattern of inflation growth with the year-over-year pace of growth in in-place rates for all care segments (independent living, assisted living and memory care). The pace of growth in rates generally stayed moderate and largely aligned with the inflation rate in 2020, but there was a notable shift in trend during the early months of the pandemic.  

The exhibit shows that by mid-2020, year-over-year growth in in-place rates for the independent living care segment fell below the inflation rate, while growth in in-place rates for the memory care segment shifted to positive territory and experienced growth above the inflation rate. This could be explained by a rate adjustment to account for the increased care costs associated with the pandemic’s impact on high-acuity residents and needs-driven care settings. 

By December 2020, in-place rates for the independent living care segment – frequently more of a lifestyle choice than need-driven – had the smallest increase and were up by 0.1% from year-earlier levels and continued to record the smallest increases since the trend shift occurred, followed by the memory care segment (up by 2.4% from year-earlier levels), and the assisted living care segment (up by 2.7% from year-earlier levels). Over the same period, the annual inflation rate stood at 1.4% in December 2020. 

Year-over-Year In-Place Rate Growth During Inflationary Times 

The vaccine rollout happened to coincide with the start of rising inflation in early 2021. Notably, inflation rates rose from 1.4% in January 2021 to 5.0% in May 2021 and stayed within the 5.0% range for five months. During this period, year-over-year in-place rates growth remained somewhat stable across all senior housing care segments. However, as inflation soared to unprecedented levels by the end of 2021 and began to impact the operating costs of senior housing operators amid relatively low occupancy rates, in-place rates across the three care segments started to increase and followed inflation rates, but this time remained lower than inflation rates.  

In the first half of 2022, as inflation reached a boiling point, senior housing in-place rates rose to record highs from year-earlier levels across all senior housing care segments despite the market’s still relatively low occupancy levels in general.  

By December 2022 and as the pace of inflation began to slow, in-place rates for the independent living care segment had an annual growth of 5.2%, the highest year-over-year growth in the time series, in-place rates for the assisted Living care segment grew by 5.8% year-over-year, but was down one percentage point from the highs seen in June 2022 (6.8%), and memory care in-place rates increased by 5.3% from year-earlier levels, down 2.6 percentage points from the time series high of 7.9% in October 2022. Comparatively, the inflation rate was 6.5% in December 2022, higher than in-place rate annual increases across all care segments. 

Learn more about discounting of in-place rates relative to asking rates.

Section 3 – Uncovering Property-Level Insights for the First Time: A Deep Dive into Actual Rates Data. 

Unpacking the Analytical Methodology 

For the first since NIC MAP Vision launched the NIC MAP Vision Actual Rates Data Initiative, NIC Analytics conducted an in-depth analysis to examine the distribution of senior housing in-place rate growth across all senior housing care segments (independent living, assisted living, and memory care) at the property level, and the impact of these year-over-year increases on occupancy and absorption, as measured by the change in occupied units. Note that in-place rates are defined as the room fee and any care fees as of the end of the month paid by residents who took occupancy prior to the current month. Additionally, in-place rates include any discounting that may be occurring relative to asking rates.   

The analysis was conducted using quintiles to examine the distribution of in-place rate growth in December 2022 from year-earlier levels on a same store basis. This methodology divides the data into five equal cohorts based on the distribution of percentiles and includes only those segments within properties that have reported data in both comparison months (December 2021 and December 2022). Properties reporting in one but not both months were removed from the analysis.  

Additionally, this analysis centers on examining the relationship between in-place rate growth and demand as measured by the change in occupied units, or absorption and occupancy rates; it does not take into consideration supply trends, as it pertains to same-store metrics. Note that the change in inventory within the same store properties captured in this analysis was very small. 

Independent Living Care Segments: In-Place Rate Increases and the Effect on Occupancy and Absorption 

Exhibit 2 below shows how year-over-year in-place rate increases in December 2022 are distributed among the independent living care segments. The exhibit also illustrates the relationship between these increases and the growth in demand and average occupancy gains across the five quintiles in the same segment. 

The data shows that for the independent living care segment – frequently more of a lifestyle choice than need-driven, the stronger the demand, the greater the pace of increases in in-place rates. Notably, annual increases in in-place rates are highly associated with stronger demand and improvements in occupancy rates. This makes sense from the simple laws of supply and demand dynamics. However, this is not the case for the assisted living or memory care segments. 

In the two post-worst years of pandemic recovery, 2021 and 2022, properties with higher in-place annual growth rate generally maintained higher occupancy rates and experienced larger increases in both occupancy and demand or said another way, the most occupied properties were able to command the largest pace of growth for in-place rates. Conversely, independent living properties with lower in-place annual growth rate tended to have lower occupancy rates and experienced less demand growth, in general. This means that the lowest occupied properties had the most limited ability to grow in-place rates.   

In-place rate growth across quintile five for the independent living segment, which includes the 20% of independent living segments within the 80th and 100th percentiles, experienced relatively stronger demand despite having the highest year-over-year in-place rate growth (equal or above 8.2% in December 2022). In fact, these segments reported a 3.2 pps increase in occupancy, from 83.8% in December 2021 to 87.0% in December 2022, mainly driven by an annual absorption rate of 4.3%, as measured by the change in occupied units. The same story applies to the independent living care segments within quintile 4 (the 20% of segments at the property level within the 60th and 80th percentiles in the distribution of year-over-year in-place rate growth).  

Perhaps, not surprisingly, the median in-place rates in December 2022 across independent living segments captured within both quintiles four and five are also the highest rates — $3,968 and $4,079, respectively. Such relatively high rates suggest that these segments are likely within high-end properties, designed and built to provide a range of premium features and amenities to selective residents interested in exclusive lifestyle experiences and prime location, among other high-end features. 

While high-end properties may offer a higher standard of living and amenities, residents can still become more resistant and sensitive to rate increases after a certain point, even if they can technically afford the higher rate. In fact, in December 2022, quintile five, which captures the highest rate increases, had relatively lower occupancy rates compared with quintile four. This was the case for the independent living care segments as well as for the assisted living care segments and memory care segments.  

Conversely, the 20% of segments captured within quintile one, equivalent to the 20th percentile in the distribution, reported a negative year-over-year in-place rate growth (less than negative 0.1%) and had the lowest occupancy rates in both December 2021 and December 2022, at 72.5% and 74.4%, respectively. Interestingly, these segments reported a relatively larger occupancy gain (1.9 pps) and demand growth (2.7%) in December 2022 from year-earlier levels, compared with the second and third quintiles (40% of segments within the 20th and 60th percentiles in the distribution of in-place rate growth), but less than in the top two quintile tiers. In fact, the second and third quintiles reported the smallest demand growth and occupancy recovery. 

The relatively lower median in-place rate for quintile one ($3,063) and quintile two ($3,080) suggests that these segments exist within properties that are designed and built to provide basic and less pricey housing for residents with lower incomes or those who choose not to spend their money on expensive housing. Additionally, the fact that these segments have negative in-place growth rates also suggests that their demand may have contracted more severely during the height of the pandemic, and to accelerate the recovery of occupancy, one potential option was likely to lower rates, or they may have been trying to buy occupancy. 

Assisted Living Care Segments: In-Place Rate Increases and the Effect on Occupancy and Absorption 

Unlike independent living care segments, the data in Exhibit 3 below suggest that there is negative correlation between in-place rate increases and demand growth/occupancy recovery in the assisted living care segments (more of a need-driven than lifestyle choice). This means that as year-over-year in-place rate increases get smaller, there is a stronger demand growth and occupancy recovery, on average.   

Said another way, there is evidence that operators of assisted living properties bought occupancy by limiting rent growth, so to speak. That is, the lowest occupied assisted living care segments were able to generate new demand and grow occupancy faster, but this occurred largely because of minimal or even negative rent growth. And on the other hand, the highest priced assisted living units were able to command the most rate growth (nearly 12%), maintained relatively stable occupancy, but saw little net new demand.   

More specifically, the assisted living care segments within quintile one, which refers to the 20th percentile of year-over-year in-place rate growth in the distribution (less than 0.9% – note that most of these segments reported negative in-place rate growth, equivalent to 17% of the total care segments count), experienced the strongest demand recovery and largest occupancy gains. Notably, occupancy within these segments increased by 6.3 pps, from 69.0% in December 2021 to 75.3% in December 2022, and occupied units grew by 9.5% over the same period. Despite the notable improvements in demand and occupancy, the lower 20% in the distribution continued to have the lowest occupancy rates across the board in both December 2021 and December 2022. This could be due relatively larger occupancy declines during the peak of the pandemic. 

On the other end of the distribution, segments within quintile five, equivalent to the upper 20% of year-over-year in-place rate growth in the distribution (11.7%+), reported the smallest gains in demand and occupancy. Additionally, quintile five had relatively lower occupancy rate in December 2022 across all quintiles, with the exception of quintile one. This is likely due to steep rate hikes and suggests that it is vital to understand what current and potential senior housing residents are willing to pay and the potential impact of higher rate increases on the pace of move-ins and move-outs. Monitoring this relationship can help demand and occupancy recover faster, and inform the potential for future rate increases, especially as inflation eventually subsides.  

Another important takeaway from this data is that the difference between the median in-place rate for quintile one ($5,092) and those of all other quintiles was the smallest across all senior housing care segments (about $500). This suggests that in December 2021, prior to the annual increases depicted in Exhibit 2 below, median in-place rates for assisted living care segments were somewhat aligned, but due to very low occupancy rates for quintile one, small and often negative increases were adopted to boost occupancy recovery.  

Memory Care Segments: In-Place Rate Increases and the Effect on Occupancy and Absorption 

The memory care segments (also a more need-driven than lifestyle choice) exhibited similar patterns as the assisted living care segments. The smaller the year-over-year in-place rate growth, the larger the demand growth and occupancy recovery. The highest priced memory care units were able to command the most rate growth (over 12%), maintained relatively stable occupancy, but saw little net new demand. Conversely, the lowest occupied memory care segments/properties were able to generate new demand and grow occupancy faster, but this occurred largely because of minimal or even negative rent growth.   

Just like the assisted living care segments, the third and fourth quintiles had and maintained the highest occupancy rates in December 2021 and December 2022, although experienced a relatively smaller demand growth and occupancy improvements compared with the first and second quintiles. Additionally, quintile five, the equivalent of the upper 20% of year-over-year in-place rate growth in the distribution (12%+, the highest increase across all quintiles and care segments), reported a negative absorption rate of 0.1% and the smallest gain in occupancy rates across all quintiles and care segments. Further, quintile five had a relatively lower occupancy rate in December 2022 compared with the third and fourth quintiles. Again, this is likely due to steep rate hikes.  

On the other hand, quintile one (year-over-year in-place rates below 1.1% – note than most of these segments reported negative in-place rate growth, equivalent to 16% of the total care segments count) had the strongest demand growth and the fastest occupancy recovery in December 2022 from year-earlier levels. Demand grew by 8.3%, and as a result, occupancy increased by 6.3 pps, from 73.5% in December 2021 to 79.8% in December 2022. Compared with quintile five, quintile one closed the occupancy gap from 8.5 pps in December 2021 to 2.6 pps in December 2022. 

Notably, the difference in the median in-place rates in memory care segments between quintile one ($6,738 – least occupied segments overall) and upper quintiles four ($7,593) and five ($7,870) – most occupied segments overall, was the widest of all three care segments, with a gap ranging from $800 to $1,100. 

Overall, the effect of in-place rate increases on occupancy and demand in all care segments is influenced by multiple factors, including the local market conditions, availability of options for residents with varying income demographics, the specific property and its amenities, and the perceived value of the unit in comparison to the competition in the area. 

Interested in learning more?  

To learn more about NIC MAP^® data, powered by NIC MAP Vision, and accessing the actual rates data, schedule a meeting with a product expert today.  

NIC MAP Vision welcomes your participation by contributing your properties’ data to the actual rates data set. Find out more by visiting NIC MAP Vision’s website. 

NIC MAP Vision released its latest Skilled Nursing Monthly Report on March 2, 2023. The report includes key monthly data points from January 2012 through December 2022.

Here are some key takeaways from the report:

Occupancy

Skilled nursing occupancy declined slightly, dropping one basis point from November to end December at 79.6%. Occupancy is up 182 basis points from one year ago in December 2021 as it continues to recover since the pandemic low of 73.6% set in January 2021. Occupancy has oscillated between 79.0% and 79.7% since May. Challenges do persist as staffing shortages continue to create difficulties within skilled nursing properties limiting the ability to admit new residents in some markets. However, the current occupancy trend does suggest that demand for skilled nursing properties is recovering, given the increase in occupancy in 2022. Occupancy remains low compared to February 2020 pre-pandemic levels of 87.8% (8.2 percentage points).

Medicare

Medicare revenue per patient day (RPPD) increased slightly from November to end December 2022 at $593. It has increased 3.1% since September. Most of this increase in reimbursement is likely a result of the increase in Medicare rates to skilled nursing properties for fiscal year 2023 and potentially higher acuity patients, which also increases RPPD to care for more complex patients. Meanwhile, Medicare revenue mix increased for the third month in a row. It increased 56 basis points from November to end December at 22.6%. It is up from one year ago as well, increasing 196 basis points from December 2021.

Managed Care

Managed Medicare revenue mix declined slightly, dropping 25 basis points from November to end December at 10.2%. It has declined 163 basis points since its recent high of 11.8% in February 2022. However, it is up by 171 basis points from the pandemic low set in May 2020 of 8.5%. Expectations are that it will continue to increase over time with the growth of managed Medicare. Meanwhile, Managed Medicare revenue per patient day (RPPD) decreased from $473 to $472 in December and is down 1.2% from last year in December 2021. It has decreased $120 (20.2%) from January 2012 and continues to pressure some operators’ revenue as managed Medicare enrollment grows around the country. However, some operators see managed Medicare as an opportunity for growth in patient volume.

Medicaid

Medicaid patient day mix decreased to 63.8 % in December. However, it has increased 175 basis points from the pandemic low of 62.1% set in January 2021. In addition, Medicaid revenue mix decreased in December, representing just less than half of property revenue at 49.4%. However, it has increased 210 basis points from the pandemic low of 47.3% set in February 2022. Meanwhile, Medicaid revenue per patient day (RPPD) declined slightly to $265 in December. It increased 0.73% from $263 one year ago in December 2021.

Get more trends from the latest data by 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.

The COVID-19 pandemic has been devastating for older adults in the U.S., particularly those with existing chronic medical conditions and complex health care needs. Many of the individuals most impacted by COVID-19 reside in nursing homes, a setting that accounted for at least 25% of all COVID-19 deaths. This setting is often conflated with senior housing, even though they are distinct care settings and serve different, although at times overlapping, populations.  

To maintain the health and safety of residents, improve infection control procedures, and navigate potential future pandemics, it is imperative that there be an understanding of the impact that seniors’ housing type had on excess mortality — the difference in mortality rates during the pandemic relative to deaths before the pandemic. In order to garner this improved understanding, NORC at the University of Chicago, on behalf of NIC, conducted a landmark study comparing excess death rates for older adults living in senior housing, long-stay nursing homes, and non-congregate residential settings in the community at large. 

The study measured excess death rates for older adults by housing and care setting across two distinct time periods – one prior to vaccine availability and another post-vaccine availability. The study also took into consideration the health status, demographic characteristics, health care usage, and geographic location of older adults to allow comparisons of comparable older adults regardless of where they lived. 

Prior to vaccine distribution, older adults living in congregate senior living and nursing care settings did have greater excess mortality than those living in residential non-congregate settings in the community at large. Given what we now know about COVID-19 transmission, the inherent risk for those with underlying health conditions, and the elevated risk for persons who require close contact caregiving, this is an expected finding.  

Study results for the post-vaccine implementation period, however, highlight how excess mortality in senior housing settings fell to similar rates as the non-congregate settings. 

When comparing similarly frail older adults after COVID-19 vaccines had become available, the study concluded that continuing care retirement communities (CCRCs, also referred to as life plan communities) were significantly safer than being in the community at large. Additionally, independent living (IL), assisted living (AL), and memory care (MC) settings were determined to be as safe or nearly as safe as compared to being in the community at large once vaccines became available. 

A possible explanation for these findings is that vaccine availability, distribution, and uptake among residents in congregate settings led to earlier vaccination and ultimately improved outcomes. Senior housing and nursing home settings were among the first to receive vaccines and conduct on-site vaccine clinics for residents and staff. Earlier vaccine rollout may have led to a return to socializing for the independent living cohort or stress reduction amongst those receiving vaccines. Thus, earlier vaccine administration may have had a protective impact on certain risk factors, such as isolation and loneliness.  

One of the study’s key conclusions emphasizes how long-stay nursing care differs from senior housing regardless of vaccine availability. In both the pre-vaccine and post-vaccine study periods, long-stay nursing homes had a greater rate of excess mortality than senior housing. Study findings related to the number of chronic conditions residents have by property type underscore a key contributing factor: residents in a skilled nursing setting average more than 16 chronic conditions. 

While residents in other senior housing settings also have a significant number of chronic conditions, it is residents of skilled nursing who are at the top. This conclusion is consistent with findings from Phase I of study that show COVID-19 mortality rates across senior housing settings increase as the health and caregiving complexity of residents increase.  

The study introduced a new way to use Medicare claims data to assess the health and outcomes of older adults in senior housing and nursing care settings compared with the community at large. The methodology for the study utilizes an academically-designed data linkage approach which combines property information from NIC MAP® Data Service, powered by NIC MAP Vision, with Medicare claims and administrative data. The analysis allows for comparisons of comparable seniors across disparate living settings and is among the first to utilize an accurate, extensive list of senior housing properties matched to Medicare administrative data to identify residents of seniors housing, nursing homes and non-congregate settings.  

The connection between housing and health is a critical one; importantly, this study demonstrates the feasibility of utilizing administrative claims data and property data to advance the understanding of the health and outcomes of older adults residing in senior housing settings.  

View the complete white paper and associated slide deck of findings, including methodology, inclusion criteria, results, and conclusions on our website. 

Active adult rental properties serve older Americans who wish to live in a multifamily setting with other residents who generally are more independent and active than the residents in today’s senior housing offerings. NIC MAP Vision recently released inventory data for active adult  for the fourth quarter of 2022. The analysis presented in this blog post aggregates the inventory and demographics of these active adult communities by market; calculates penetration rates within each market; and identifies where the largest concentration of inventory is located. Note that this analysis simply evaluates the supply side of the active adult market given the availability of inventory data. NIC MAP Vision is scheduled to release performance data such as occupancy and rents later in 2023, which should provide further insight into active adult demand.

How Much Inventory Exists?

NIC MAP Vision tracked 625 active adult properties totaling 87,763 units, as of the fourth quarter of 2022. By geographic location, 345 properties (55% of inventory) comprised of 53,396 units (61% of inventory) are located within the 31 Primary Markets tracked by NIC MAP Vision; 182 properties (29%) comprised of 23,706 units (27%) are located within the Secondary Markets (metro markets 32 to 99); while the remaining 98 properties (16%) comprised of 10,661 units (12%) are located in other markets.

Active Adult Inventory by Number of Properties and Units | All Markets | 4Q 2022

Source: NIC MAP^® Data, powered by NIC MAP Vision

Looking at individual markets, Dallas is the largest market by unit count (6,448), followed by New York (4,568) and Los Angeles (4,411). Eight of the ten largest active adult markets are within the 31 Primary Markets tracked by NIC MAP Vision, while Buffalo, NY (2,965 units) and Austin, TX (2,747 units) are Secondary Markets.

Largest 10 Active Adult Markets by Number of Units | All Markets | 4Q 2022

Source: National Investment Center for Seniors Housing and Care (NIC) and NIC MAP^® Data, powered by NIC MAP Vision  

Largest 10 Active Adult Markets by Percent of Inventory | All Markets | 4Q 2022

Source: National Investment Center for Seniors Housing and Care (NIC) and NIC MAP^® Data, powered by NIC MAP Vision  

Penetration Rates

Penetration rates are a comparison of housing inventory for older adults within a market to that market’s cohort of older adults. High penetration rates can be positive indicators of product acceptance and operator success and/or negative indicators of elevated competition. This rate can be calculated in a few ways. For senior housing, which is comprised of Majority Independent Living and Majority Assisted Living, NIC traditionally has used total inventory as the numerator and households age 75 and older as the denominator. 

For this analysis, we use active adult inventory in units as the numerator. An alternative method is to use occupied units as the numerator as opposed to total inventory, but as noted above, occupancy data is not yet available. This alternative calculation may prove useful once available, and likely no single method is perfect. For the denominator: 

• First, we use households age 65 and older (rather than 75 and older) to better capture the demographic make-up of active adult communities in which residents are age-eligible beginning at, for example, 55+, 62+, or 65+ years old, with an average resident age of 72-74 years old.
• Second, we calculate an additional penetration rate using population age 65 and older (rather than households), which results in a larger denominator and, thus, a smaller penetration rate. 
  Utilizing these two methods, penetration rates appear quite small for the active adult market, ranging from 0.1% to 0.4%. This compares to the 10.9% to 11.7% range for senior housing penetration rates across market classes. 

Penetration Rates by Property Type and Market Class | 4Q 2022

Source: National Investment Center for Seniors Housing and Care (NIC) and NIC MAP^® Data, powered by NIC MAP Vision  

When ranking individual markets, the highest 20 markets have penetration rates that range from 0.5% in Corning, NY to 2.1% in Dover, DE. Within these markets that comprise the 20 highest penetration rates:

• Primary Markets include Las Vegas, San Diego, and Dallas
• Secondary Markets include Buffalo, NY and Austin, TX

20 Highest Active Adult Penetration Rates | All Markets | 4Q 2022
 

Conclusion

The active adult property type is garnering increased interest from developers, operators, investors, and older adults due to the unique preferences of the baby boomer generation. While some markets contain active adult inventory in the thousands of units, the very low penetration rate relative to traditional senior housing indicates that the active adult product type is still in its nascent stages. Overall, the large number of households and population age 65 and older is significant and growing, and when compared to existing inventory, penetration rates also likely indicate that there is room for new active adult supply from those vying to enter the space.

Mullen and Colson Scholars Lead the Way

With an assist from NIC, universities and colleges are ramping up their senior living programs helping to build a robust pipeline of new, committed industry leaders.  

Take, for example, Rebecca Bond. She’ll graduate this spring with a master’s degree in Management of Aging Services from the Erickson School of Aging Studies at the University of Maryland Baltimore County (UMBC). 

Trained as a physical therapist, Bond previously worked at The Village at Rockville, a life plan community (CCRC) in Rockville, Maryland. During the pandemic, she took on more leadership responsibilities and started taking classes at the Erickson School to sharpen her management skills.

With the help of a $5,000 Mullen Scholarship, named in honor of NIC co-founder Anthony J. Mullen, she was able to devote full time to pursue a graduate degree at the Erickson School. “I could not have afforded to attend school full time without the scholarship,” said Bond, who also has a teaching assistantship at the school. Asked about her career goals, Bond said: “I’d like to start a business to help older adults age in place wherever they choose.” 

Pictured: Rolanda Bragg, Dr. Dana Bradley, Michele Steele, Robert Kramer, and Rebecca Bond

NIC has a long history of working with colleges and universities to raise the profile of the industry and to educate new leaders. As a nonprofit organization with a mission to improve the lives of older adults, NIC has helped to support senior living university programs and scholarships.  

In addition to the Mullen Scholarship, NIC also donated $100,000 to help fund the William E. Colson Scholarship at the Erickson School. It is named for the former president and CEO of Holiday Retirement Corp. Colson, now deceased, matched  NIC’s gift at the time with a $100,000 donation of his own.    

“The industry needs to attract the best and the brightest,” said NIC Co-Founder and Strategic Advisor Robert G. Kramer. He is also Founder & Fellow at Nexus Insights, a think tank advancing the well-being of older adults through innovative models of housing, community, and healthcare. “These scholarships will help meet senior living’s huge leadership and workforce demands.”  

The Erickson School serves 800 students through its program that combines business management, public policy and the study of aging to meet the demand for educated and innovative leaders in the longevity market. The program offers undergraduate and graduate degrees in aging studies, along with merit and need-based scholarships.    

The Mullen and Colson scholarships are both endowments. Donations are invested and a portion of the earnings from the investment are awarded as scholarships. Awards range from $2,500 to $10,000. “We continue to raise money from donations,” said Paul Stearns, assistant dean and chief of staff at the Erickson School.

Spreading the Word 

The professional staff at NIC and its board members have donated hours of their own time to teach classes and speak at various other schools about the senior housing and care industry. They have also helped to develop curriculums to spotlight the field’s sizable opportunities amid a growing wave of older adults.    

To further bolster its educational efforts, NIC’s Future Leaders Council includes a university outreach committee. They work with the colleges and graduate schools they attended and other schools to raise the profile of the field and attract more students to the sector. NIC also offers scholarships to select students currently enrolled in senior living programs to attend its conferences.  

Recounting the history of NIC’s educational efforts, Kramer recalled that it was Mullen who first recognized the need to educate people about the senior living industry. In the 1990s, when the industry was just emerging, many people either weren’t aware of senior living or equated it with the stereotype of old-style institutional nursing homes. “We were an unknown,” said Kramer.  

In 1995, NIC launched an executive development program at Johns Hopkins University. “Mullen drove that program,” said Kramer. “He had a passion for education.” 

The program later moved to UMBC and in 2004 John C. Erickson founded the Erickson School of Aging Studies with the backing of then UMBC President Freeman Hrabowski.  

Well-known in the industry, Erickson was the CEO and founder of Catonsville-based Erickson Living. He helped to establish the school with a $5 million donation which was matched by the state of Maryland. NIC donated $100,000 to help launch the school.  

The NIC executive education program provided the school’s primary enrollment. Mullen and Kramer devoted much of their time to ensure that the curriculum would meet the needs of the next generation of senior housing leaders. 

When Mullen died suddenly in 2018, Kramer led an effort to fund the Anthony J. Mullen Scholarship program in his honor at the Erickson School, raising more than $400,000. A broad cross section of industry leaders and stakeholders contributed to the fund. Brookdale Senior Living made the largest donation to honor long-time CEO Bill Sheriff, now deceased. “Our goal with the scholarship fund was to honor Mullen’s passion for senior living and education,” said Kramer. 

Today, Mullen’s legacy is being realized by students like Demetrie Garner. He is a Mullen Scholar and in his last year as an undergraduate at the Erickson School. Like many students at the school, Garner, age 44, is finishing a degree later in life to make a change.  

Garner’s grandmother had a stroke in her 70s and then suffered from dementia. “That always stuck with me,” said Garner, who spent years struggling with substance use disorder. He enrolled at the Erickson School and continues to work full time in research at a hospital. This year he received a $5,000 Mullen scholarship.  

 “The money is great, but there’s something special about the acknowledgement,” said Garner. With a degree in the management of aging services, he plans to work with older people who struggle with substance abuse and also need treatment for hepatitis C infection, conditions that often go hand-in-hand. “The scholarship gave me a real burst of confidence,” he said.
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Note: This is the first in a series of articles spotlighting senior living scholars and the university programs that support them. The stories of these future leaders highlight the personal and institutional commitment that NIC has made to the wellbeing of older Americans.