Seniors Housing Occupancy Unchanged in Third Quarter
ANNAPOLIS, MD.—The occupancy rate for seniors housing was unchanged this quarter, and the number of units under construction appears to be leveling, according to NIC MAP, a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC). The data also shows little change in the rate of rent growth for seniors housing but a slight increase in private-pay rents for skilled nursing.
The average occupancy rate for seniors housing properties in 3Q10 was 87.7%, which was unchanged from 2Q10 and suggests that occupancy has stabilized. Since the second quarter of 2009, seniors housing occupancy rates have been trending within a tight range between 87.5% in 1Q10 and 88.1% in 3Q09.
NIC MAP data also reveals divergent trends in occupancy rates between independent living and assisted living properties. The independent living occupancy rate was 87.1% in 3Q10, down 30 basis points from the previous quarter. In contrast, assisted living occupancy was 88.7% in this quarter, which was up 40 basis points from 2Q10.
“While independent living occupancy rates are continuing to establish new cyclical lows, assisted living occupancy rates are recovering from recent lows,” said NIC Research Director Chuck Harry.
Annual rent growth for seniors housing in the third quarter of 2010 was 0.7%, which is little changed in comparison to the previous quarter when it was 0.8%. One year ago, in 3Q09, annual rent growth was 2.0%.
Construction activity for seniors housing also declined slightly in 3Q10 to 2.0%, and it appears to be leveling. The data shows that there is new construction activity, but new construction starts are largely replacing the units opening on a quarterly basis.
The skilled nursing occupancy rate was 88.5% in 3Q10, down just 0.1% from 2Q10 and continuing the trend of marginal declines for the past four years. In contrast to the seniors housing rent growth trend, skilled nursing private pay rents grew 3.3% annually this quarter, reflecting continued growth. This sector’s inventory also showed a slight negative decline on an annualized basis of 0.1% in 3Q10, and annual absorption declined 0.7%.