Led by gains in assisted living occupancy, senior housing occupancy continues to close in on pre-pandemic levels.
ANNAPOLIS (April 4, 2024) – The senior housing occupancy rate for the 31 NIC MAP Primary Markets increased 0.5 percentage points from 85.1% in the fourth quarter of 2023 to 85.6% in the first quarter of 2024, according to data released by NIC MAP Vision and analyzed by the National Investment Center for Seniors Housing & Care (NIC). The occupancy rate has increased 7.8 percentage points from a pandemic-related low of 77.8% in the second quarter of 2021, bringing occupancy to within one and a half percentage points of the pre-pandemic level of 87.1% in the first quarter of 2020.
The first quarter of 2024 represents the 11th consecutive quarter of occupancy gains, driven by high rates of demand. First quarter net absorption of roughly 5,000 units across the NIC MAP Primary Markets represents a more than 40% increase over the historic absorption levels of first quarter 2023.
The assisted living occupancy rate improved 0.6 percentage points from the prior quarter to 84.0%, while the independent living occupancy rate improved 0.3 percentage points to 87.1%. Both gains are higher than the occupancy gains seen in the first quarters of 2022 and 2023. First quarter occupancy rates are 0.4 and 2.5 percentage points from pre-pandemic levels for assisted living and independent living, respectively.
“The continued upward climb of occupancy along with strong absorption levels supports the NIC forecast of returning to and surpassing the pre-pandemic occupancy levels sometime in 2024,” said NIC’s Head of Research & Analytics, Lisa McCracken.
Senior Housing construction starts increased slightly from the fourth quarter of 2023 to 2,236 new units started in the first quarter of 2024, with assisted living moderately above independent living starts. Despite slight upticks in new projects in the first quarter, the rolling four-quarter average for construction starts sits at 1.37% of total inventory, the lowest level since first quarter 2010. Higher costs of capital and challenged lending environment conditions continue to weigh on new supply.
“With little change in access to capital and in borrowing costs, particularly for new projects, we continue to see depressed levels of construction starts,” said Caroline Clapp, senior principal with NIC. “We expect this trend to continue until financing conditions ease.”
Low rates of new development come with a silver lining for the industry in the form of converting elevated absorption into increased occupancy. “The combination of significantly elevated absorption levels, suppressed supply growth, and a growth rate for the 80-plus demographic nearly double that of 2019 is making for a dynamic time in the senior housing market,” said Arick Morton, CEO of NIC MAP Vision. “This is especially true as the 80-plus population is set to grow by more than 20% over the next five years, further propelling demand.
Boston (91.0%), Baltimore (88.5%), and Minneapolis (88.2%) continued to have the highest occupancy rates of the NIC MAP Primary Markets, while Houston (80.2%), Las Vegas (81.6%), and Atlanta (82.1%) recorded the lowest.
A summary of the NIC MAP Market Fundamentals Data, released by NIC MAP Vision, is below. The Market Fundamentals report will be available at 4:30 p.m. ET on Thursday, April 4, 2024.
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About the National Investment Center for Seniors Housing & Care
The National Investment Center for Seniors Housing & Care (NIC), a 501(c)(3) organization, works to enable access and choice by providing data, analytics, and connections that bring together investors and providers. The organization delivers the most trusted, objective, and timely insights and implications derived from its analytics, which benefit from NIC’s affiliation with NIC MAP Vision, the leading provider of comprehensive market data for senior housing and skilled nursing properties. NIC events, which include the industry’s premiere conferences, provide sector stakeholders with opportunities to convene, network, and drive thought-leadership through high-quality educational programming. For more information, visit NIC’s website and follow NIC on LinkedIn and Facebook.
About NIC MAP Vision
NIC MAP Vision maximizes access, choice, and quality in senior housing by providing data, analytics, and services to industry stakeholders and partners. We are the only intelligence provider exclusively dedicated to senior housing. As the industry’s gold standard for market analytics data, we are trusted by the largest government agencies, 18 of the 20 largest senior housing operators, and most of the largest investors and owners. Every day, thousands of industry professionals use our data platform and proprietary tools to make smarter decisions about where to grow, how to grow, and how to bring a strategy to life. For more information, visit https://www.nicmapvision.com/