Skilled nursing facilities (SNFs) saw a slight increase in occupancy, whereas assisted living facilities (ALFs) saw a small decrease in the first quarter of 2014, according to the National Investment Center for the Seniors Housing & Care Industry (NIC).
NIC’s MAP Data and Analysis Service, which tracks more than 12,600 properties on a quarterly basis in the 100 largest metropolitan markets, also released data related to rent growth, annual absorption, inventory growth and construction.
Occupancy. Overall, the average occupancy rate for senior housing properties in the first quarter of 2014 was 89.8 percent, an increase of 0.1 percentage points from the previous quarter and a 0.8 percentage point increase from a year earlier. As of the first quarter of this year, occupancy was 2.9 percentage points above its cyclical low of 86.9 percent during the first quarter of 2010.
The SNF occupancy rate was 88.4 percent in the first quarter of 2014, an increase of 0.4 percentage points from the fourth quarter of 2013. The occupancy rate for ALFs averaged 89.1 percent during the first quarter of 2014, a decrease of 0.1 percentage points when compared with the previous quarter but 2.4 percentage points above its respective cyclical low. The occupancy rate for independent living properties averaged 90.2 percent during the first quarter of 2014, an increase of 0.2 percentage points compared with the previous quarter and 3.4 percentage points above its cyclical low.
Asking rent growth. During the first quarter of this year, the rate of seniors housing’s annual asking rent growth was unchanged at 1.6 percent and was 0.7 percentage points below its pace one year earlier, during the first quarter of 2013.
“At 2.1 percent, annual asking rent growth for assisted living was stronger than for independent living, [which was] at 1.4 percent,” says Beth Mace, NIC’s chief economist. “Rent growth for both sectors exceeded the estimated increase in costs for wages and food, two significant contributors to expense growth for the seniors housing sector,” she adds.
Private-pay rents for the nursing care sector grew 2.8 percent year-over-year this quarter, which is 0.1 percentage points below the pace of the previous quarter.
Absorption. Senior housing’s annual absorption was 2.2 percent as of the first quarter of this year, compared with 2.2 percent during the fourth quarter of 2013 and 2.1 percent during the first quarter of 2013. Nursing care annual absorption was 0.3 percent in the first quarter of 2014, which was the first positive gain in nursing care absorption since NIC MAP initiated coverage in the fourth quarter of 2005.
Inventory growth. In the first quarter of this year, the senior housing annual inventory growth rate was 1.4 percent, which is near where it has oscillated since the fourth quarter of 2011. Current construction as a share of existing inventory for seniors housing was 3.1 percent, which is 0.1 percentage points below that of the previous quarter.
Nursing care annual inventory growth was ‒0.1 percent in the first quarter of 2014, continuing the established trend of slightly declining inventory growth.
Construction. “The recent moderating pace of seniors housing’s overall current construction levels is primarily the result of moderating construction starts in assisted living properties,” says Chuck Harry, NIC’s managing director and director of research and analytics. “In fact, 2014’s first quarter recorded the lowest number of units starting construction within assisted living properties of any quarter during the past 4.5 years,” he adds, noting that weather may have contributed to the difference.
Source: National Investment Center for the Seniors Housing & Care Industry's MAP Data and Analysis Service