The National Investment Center for the Seniors Housing & Care Industry (NIC) data for the third quarter of 2009 showed that occupancy rates in independent living and assisted living remained relatively flat and that rent growth and construction starts slowed, suggesting that seniors housing occupancy may be reaching bottom. NIC’s research data showed some of the following trends:
- During 3Q09, year-over-year rent growth slowed considerably for seniors housing. The average rent growth for independent living and assisted living units was 1.8% for 3Q09. This compared to 3.3% in 3Q08 and 4.0% in 3Q07.
- Between 2Q09 and 3Q09, the average occupancy rate rose by 0.1 percentage point to 88.5% for independent living properties or continuing care retirement communities with a majority of independent living units. This was the first time in nine consecutive quarters – since 1Q07 – that independent living occupancy rates did not decline.
- During the third quarter, 2,002 independent living units were absorbed, outpacing inventory growth of 1,950 units. This was the highest absorption level since 1Q08, when it was 2,269 units.
- Assisted living properties or continuing care retirement communities with a majority of assisted living units – the average occupancy rate in the third quarter of 2009 increased 60 basis points to 88.3% compared to the previous quarter
- Negative occupancy [and absorption trends] continued for skilled nursing facilities. In 3Q09, the average occupancy rate fell to 89.1% from 89.2% in 2Q09.
- For independent living construction starts, trailing-twelve month (TTM) activity was 0.7%, which compared to 2.6% in 3Q08. Construction starts for assisted living slowed to 0.8%, which was down from 2.0% in 3Q08.
"The lack of available construction financing is fueling this slowdown and will continue to impact construction starts for many months to come," noted Michael Hargrave, vice president – NIC MAP®. "On the flip side, once financing becomes available, pent-up demand for seniors housing will create many opportunities for developers."
For the full release, visit: https://www.nic.org/news/Feb9.aspx