The costs of senior housing are increasing even as occupancy rates fell for senior housing in the first quarter of 2010 according to data recently released by National Investment Center for the Seniors Housing & Care Industry (NIC). The data, which analyzes the top 31 metro markets in the United States, shows that the number of senior housing projects under construction continues to decline as a result of project openings and lack of construction starts based upon continued tight credit for senior living development.
Trends for Q1 2010 occupancy rates, inventory and average monthly rent (AMR) include:
- The average occupancy rate fell to 88.0% for seniors housing (both independent living and assisted living properties) during the first quarter of 2010, down from 88.3% in 4Q09.
- Independent living supply in the top 31 metro markets totaled 322,225 units in 1Q10, with 283,211 total occupied units. In the same quarter, assisted living supply totaled 174,010 units, with 153,330 total occupied units. The seniors housing inventory has grown 11,826 units during the previous four quarters, while absorption during that time has been 6,108 units.
- Skilled nursing occupancy rates rose to 89.0% in 1Q10, compared to 88.8% in 4Q09.
- The average monthly rent per unit for independent living was $2,701 during 1Q10, which is up 1.5% on a year over year basis.
- For assisted living, the AMR was $3,528 in 1Q10, up 1.4% on a year over year basis. For seniors housing properties in general, year over year rent growth in the first quarter of 2010 was 1.5%, which is slower than the pace a year ago (2.6%) and two years ago (3.7%).
For the first quarter of 2010, the AMR for skilled nursing was $7,928, which is up 3.3% on a year over year basis.
"Although rent growth has slowed, it has continued to remain positive," said Michael Hargrave, vice preside – NIC MAP. "This is in sharp contrast to what we have seen in other forms of commercial real estate, and it indicates that seniors housing continues to grow and perform as a real estate asset class."