Pandemic’s effects on the sector continue to be evident
ANNAPOLIS, Md. (October 15, 2020)—According to new data from NIC MAP® Data Service (NIC MAP) provided by the National Investment Center for Seniors Housing & Care (NIC), senior housing occupancy fell 2.6 percentage points in the third quarter of 2020, from 84.7 percent to 82.1 percent, indicating a steady decline since the outbreak of the novel coronavirus.
This is the second quarter in a row where occupancy fell more than 2.5 percentage points, meaning the senior housing sector is now experiencing its largest drop in occupancy on record.
Independent living facilities saw a considerable increase in inventory, posting the largest increase since early 2009.
“This reflects the relatively robust lending and development environment of 18 to 24 months ago that supported construction starts back then and which now are completed properties entering the market,” noted Chuck Harry, chief operating officer of NIC. “Construction starts activity in the third quarter continued to be relatively weak, reflecting today’s more constrained capital markets.”
Meanwhile there are large disparities between occupancy rates across metro areas and properties. San Jose (89.9%), San Francisco (87.0%), and Portland (85.5%) had the highest occupancy rates of the 31 metropolitan markets that encompass NIC MAP’s Primary Markets, while Houston (75.9%), Atlanta (77.4%), and Phoenix (78.6%) recorded the lowest. Further, the occupancy rate for senior housing in the Sacramento area fell 8.6 percentage points since the beginning of the pandemic to 80.6 percent in the third quarter, while the Washington, D.C. area saw a smaller 2.2 percentage point drop to 84.7 percent.
“What we’re seeing is a barbell effect, where 34 percent of senior housing properties in the NIC MAP Primary Markets reported occupancies above 90 percent in the third quarter, while 36 percent reported occupancies below 80 percent,” said NIC’s chief economist, Beth Burnham Mace. “The operators with higher occupancy rates will be able to take on the stress of COVID-19, while those with lower occupancy rates will be more challenged.”
Additionally, assisted living and independent living facilities experienced their largest occupancy drop to date, falling 2.9 percentage points to 79.1 percent and 2.4 percentage points to 84.9 percent, respectively. NIC MAP’s Intra-Quarterly data show that the occupancy rate for majority assisted living facilities was down 6.1 percentage points for NIC MAP’s Primary Markets since March 2020.
A summary of the NIC MAP Data Market Fundamentals for 3Q20 is below. Click here for the Market Fundamentals report.
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Contact: Sarah Schmidt at 860-227-8216, SSchmidt@MessagePartnersPR.com.
About the National Investment Center for Senior Housing & Care
The National Investment Center for Seniors Housing & Care (NIC) is a 501(c)3 organization established in 1991 whose mission is to enable access and choice by providing data, analytics, and connections that bring together investors and providers in independent living, assisted living, memory care, skilled nursing and post-acute care. Through its industry-leading annual conferences, NIC MAP® Data Service, research, analytics and sector outreach, NIC serves as an indispensable resource for the senior housing and care sector. For more information, visit natinvcenterdv.wpengine.com and follow NIC on Twitter, LinkedIn, and Facebook.