The Highest Number of Seniors Housing Units Coming Online During Any Quarter of the Past Six Years
FOR IMMEDIATE RELEASE: Wednesday, July 8, 2015
Contact: Biba Aidoo, (410) 267-0504 or communications@nic.org
ANNAPOLIS, Md. – Overall, the average occupancy rate for seniors housing properties in the second quarter of 2015 was 89.9%, a decrease of 0.2 percentage points from the prior quarter. As of the second quarter of 2015, occupancy was 3.1 percentage points above its cyclical low of 86.8% during the first quarter of 2010.
The occupancy rate for independent living properties and assisted living properties averaged 91.0% and 88.4%, respectively, during the second quarter of 2015. When compared to the prior quarter, each property type’s occupancy decreased by 0.2 percentage points. Occupancy for independent living was still 0.5 percentage points above year ago levels, compared to assisted living which is down 0.3 percentage points from the second quarter of 2014.
“Demand, as measured by the number of units absorbed, recovered from the first quarter’s low levels, but the slip in occupancy shows that the pace of demand did not match new supply,” says Beth Mace, NIC’s chief economist. “While inventory growth outpaced absorption again this quarter,” she noted that “not all markets are having the same experience. Some markets, such as San Antonio and Riverside, are having a harder time adjusting to new product being delivered, while others continue to see occupancy gains, such as Phoenix and Minneapolis.”
During the second quarter of 2015, the rate of seniors housing’s annual asking rent growth was at 2.3%, 0.2 percentage points below the prior quarter’s pace and 0.2 percentage points above its pace one year earlier during the second quarter of 2014.
Seniors housing annual absorption was 2.1% as of the second quarter of 2015, compared to 2.3% during the first quarter of 2015 and 2.7% during the second quarter of 2014.
In the second quarter of 2015, the seniors housing annual inventory growth rate accelerated to 1.9% from 1.7% during the prior quarter. Current construction as a share of existing inventory for seniors housing was 4.2%, down 0.2 percentage points from the prior quarter.
“The quarter’s inventory growth of more than 3,600 units represents the highest number of seniors housing units coming online during any quarter of the past six years—dating back to mid-2009, which was near the end of the sector’s last construction cycle,” says Chuck Harry, NIC’s managing director and director of research and analytics. “Given the sustained rates of inventory growth expected during the coming year,” he noted that “absorption’s current pace will have to pick up in order for the market to experience any significant upward pressure on the seniors housing occupancy rate.”
The nursing care occupancy rate decreased 0.6 percentage points to 87.9% during the second quarter of 2015.
Nursing care annual inventory growth was -0.4% in the second quarter of 2015, while annual absorption was -0.7%.Private pay rents for the sector grew 2.5% year-over-year this quarter, which is unchanged from the pace of the prior quarter.
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About NIC
The National Investment Center for Seniors Housing & Care (NIC) is a 501(c)(3) organization whose mission is to advance the quality and availability of seniors housing and care options for America’s elders. NIC provides research, education, and increased transparency that facilitate informed investment decisions, quality outcomes and leadership development in seniors housing and care.
Since 1991, NIC has been the leading source of research, data and analytics for owners, operators, developers, capital providers, researchers, academics, public policy analysts and others interested in meet-ing the housing and care needs of America’s seniors. NIC has proudly sponsored the Seniors Housing & Care Journal, a peer reviewed journal for applied research in the seniors housing and care field, since 1993. One of NIC’s major initiatives to further its mission is the NIC MAP® Data Service (NIC MAP). NIC MAP is a web-based suite of research and analysis tools that tracks and reports seniors housing and care data, enabling users to gain access to more than 13,000 properties within 99 U.S. metropolitan markets and more than 600 counties. Established in 2004, NIC MAP creates transparency for seniors housing and care by offering accurate, unbiased and actionable market-level data on all of the sector’s property types and care segments including independent living (IL), assisted living (AL), memory care (MC) and nursing care (NC). Our data is updated quarterly, monthly and weekly, and is inclusive of property-level inventory by unit type, sales transactions, properties under construction and in the planning phase, aggregated occupancy and rent comparables, demographics and much more. For more information, visit natinvcenterdv.wpengine.com or call 410-267-0504.