FOR IMMEDIATE RELEASE: Wednesday, October 26, 2011
Contact: Jessica Palmeri (410) 267-0504 or jpalmeri@nic.org
NIC MAP Data Also Shows Strong Absorption and Continued Construction Decline
Annapolis, Md. – The seniors housing occupancy rate continued its recovery in the third quarter of 2011, while overall construction activity continued to decline, according to NIC MAP, a data analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC).
Overall, the average occupancy rate for seniors housing properties in 3Q11 was 88.1%, an increase of 0.2 percentage points from the prior quarter. The seniors housing average occupancy rate has risen in six consecutive quarters and is 1.0 percentage points above its cyclical low of 87.1% in 1Q10.
The occupancy rate for independent living properties in 3Q11 averaged 87.9%, and the occupancy rate for assisted living properties averaged 88.6%. Both property types showed improvement from the 2Q11 occupancy rates of 87.5% and 88.5%, respectively. The average occupancy rates for independent living and assisted living are now 1.0 and 1.1 percentage points, respectively, above their cyclical lows. “With occupancy rising each quarter since 1Q10, it is clear we are past the bottom and are clearly in the recovery stage,” says Michael Hargrave, vice president – NIC MAP.
Year-over-year rent growth for seniors housing increased to 1.6%, from 1.5% in 2Q11 and 1.2% in the third quarter of 2010. “This is the highest pace of rent growth we have seen since 1Q10,” says Chuck Harry, NIC’s director of research and analysis.
For seniors housing properties, annual absorption was 1.9% in the third quarter of 2011, compared to 1.8% in 2Q11 and 1.7% a year ago. “This is now the fourth consecutive quarter where the pace of annual absorption is above that of annual inventory growth, thereby applying upward pressure on occupancy,” says Harry.
In 3Q11, the seniors housing annual inventory growth rate was 1.0%, which is down from 1.1% in 2Q11 and 1.9% in 3Q10. This is the lowest level seen in the current market cycle. The construction vs. inventory level for seniors housing was 1.5%, which is down from 1.8% in the previous quarter.
The nursing care occupancy rate remains stable at 88.3% in 3Q11, unchanged from 2Q11. This stability in occupancy has been reported since 2Q10 in this sector.
Nursing care annual inventory growth was -0.3% in 3Q11, illustrating the established trend of slightly declining inventory growth. Private pay rents for the sector grew 3.4% year-over-year this quarter, which is a slight increase from the 3.3% pace reported in the second quarter of 2011.
About NIC
For 20 years, the National Investment Center for the Seniors Housing & Care Industry (NIC) has been committed to advancing the quality of seniors housing and care by facilitating informed investment decisions for investors, lenders, owners, operators and developers through groundbreaking research, actionable data and dealmaking events. NIC is the leading provider of historical and trend data on the industry through its NIC MAP® Data and Analysis Service that tracks more than 12,500 properties on a quarterly basis in the 100 largest metropolitan markets. Proceeds from its annual conference and other events are used to fund data and research on issues of importance to lenders, investors, developers, operators, and others interested in meeting the housing and care needs of America’s seniors. For more information, visit www.NIC.org or call (410) 267-0504.