Overall, the average occupancy rate for senior housing properties in the fourth quarter of 2014 was 90.5 percent, an increase of 0.2 percentage points from the previous quarter and a 0.9 percentage point increase from a year earlier. That’s according to information from the National Investment Center for Seniors Housing and Care (NIC) MAP Data Service. As of the fourth quarter of 2014, occupancy was 3.6 percentage points above its cyclical low of 86.9 percent during the first quarter of 2010.
“The improvement in seniors housing occupancy rates in the fourth quarter is good news and highlights the effects of the strengthening economy and growing consumer confidence levels on demand for properties that provide personal care, housing and socialization for today’s elders,” Beth Mace, NIC’s chief economist, said in a statement.
The occupancy rate for independent living properties and assisted living properties averaged 91.3 percent and 89.3 percent, respectively, during the fourth quarter of 2014. When compared with the previous quarter, independent living occupancy increased by 0.4 percentage points, whereas assisted living occupancy remained flat. The occupancy rate for independent living is now 4.5 percentage points above its cyclical low, whereas the occupancy of assisted living is 2.8 percentage points above its respective cyclical low.
The nursing care occupancy rate was unchanged at 88.3 percent in the fourth quarter of 2014.
Rent and absorption
During the fourth quarter of 2014, the rate of senior housing’s annual asking rent growth remained unchanged at 2.3 percent from the previous quarter and was 0.7 percentage points above its pace one year earlier during the fourth quarter of 2013. Private-pay rents for the nursing care sector grew 2.7 percent year-over-year this quarter, which is 0.1 percentage points below the pace of the previous quarter.
Senior housing annual absorption was 2.7 percent as of the fourth quarter of 2014, compared with 2.9 percent during the third quarter of 2014 and 2.2 percent during the fourth quarter of 2013.
“For the fourth consecutive year, annual absorption continues to outpace inventory growth for the overall senior housing sector. As a result, upward pressure continues on the overall senior housing occupancy rate. However, the underlying trends between the independent living and assisted living subsectors vary,” Chuck Harry, NIC’s managing director and director of research and analytics, said in a statement. “Whereas independent living’s annual absorption has outpaced its annual inventory growth by a large margin, that margin for assisted living is significantly narrower and is resulting in a slower recovery in the assisted living occupancy rate, which was essentially unchanged this quarter.”
Nursing care annual absorption was 0.1 percent.
In the fourth quarter of 2014, the senior housing annual inventory growth rate slowed to 1.7 percent from 1.8 percent during the previous quarter. Current construction as a share of existing inventory for senior housing was 3.5 percent, which is 0.1 percentage points below that of the previous quarter. Nursing care annual inventory growth was –0.3 percent in the fourth quarter of 2014.