Nursing care occupancy remains near cyclical low
Nursing care occupancy rose for the second consecutive quarter, although it remains near its cyclical low, according to the National Investment Center for the Seniors Housing & Care Industry. During the fourth quarter of 2012, nursing care occupancy was 88.1 percent, which was a 10 basis point increase from the prior quarter but a 10 basis points decline from a year ago.
There was no net absorption during the fourth quarter, with the number of occupied beds remaining unchanged from the prior quarter. Inventory declined by 0.1 percent during the quarter. The past several years have witnessed a phenomenon of net declining inventory from both the closing of properties and a shift from semi-private to private rooms. Although properties that are renovating semi-private rooms into private rooms are not necessarily decreasing their number of licensed beds, with the conversion to private rooms, the operational bed supply of those properties typically does decline.
Private-pay nursing care rents continued to increase during the fourth quarter of 2012 at an average annual pace of approximately 3 percent–a pace which rent growth has oscillated around for more than three years. The average per diem private-pay rate was $275 as of the fourth quarter of 2012. Private-pay residents, however, are a minority among nursing care residents, making up less than 20 percent of nursing care residents. The largest payor source is Medicaid, which is the payment source for more than 60 percent of nursing care residents.
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