NIC: Senior Living Inventory Growth to Rise 63% in Next Year

The seniors housing industry could experience modest supply pressure developing in the next year, with a focus toward assisted living and memory care units, according to research analysts during a National Real Estate Investor webinar sponsored by the National Investment Center (NIC).

As occupancy remained virtually unchanged during the first quarter of 2013 at 89.1%, reporting a 0.8 percentage point increase from the previous quarter, according to NIC MAP data, researchers anticipate inventory growth

“Over the next four quarters, we expect inventory growth to pick up its pace from the last four quarters,” said Michael Hargrave, NIC vice president and chief market & data strategist, during the webinar.


This pace pick up could translate into inventory growth rate that is 63% higher over the next four quarters than what the industry experienced over the previous four quarters, according to Hargrave.

By the second quarter of 2013, NIC analysts project the number of seniors housing units added to its NIC MAP 31 could total over 2,500 units, which would be the highest reading for MAP 31 since 2009.

Seniors Housing Supply-Demand Forecast; MAP31


NIC MAP 31 is comprised of aggregate data collected from the largest 31 core-based statistical areas in the continental U.S. as ranked by the U.S. Census Bureau.

In the next year, NIC forecasts about 10,000 units to be delivered to its MAP 31 markets, compared to the estimated 6,200 units that were added in the past year.

When questioned whether any markets will be overbuilt as a result of the growing number of units, analysts took an impartial stance—presenting the data and leaving webinar attendees to make the judgement call for themselves.

As for the direction of where development is headed, analysts agreed that the industry will step away from the predominant construction of independent living that occurred during 2005-2007, and instead will see more properties with heavier mixes of assisted living and memory care.

As of the first quarter, assisted living represented 3.8% of construction volume, whereas independent living construction remained tempered, at 1.7% construction vs. inventory—which compares the number of units started over the prior four quarters with existing inventory for that property type.

“We’re certainly seeing favorable development of more needs-driven models of seniors housing,” Hargrave said. “As assisted living starts are rolling and trending higher, this could lead to a consistent, higher level of construction for future quarters.”

In contrast, NIC says it does not see anything that indicates material rises for independent living development. 

The NIC MAP release for the second quarter is scheduled for Thursday, July 11.

Written by Jason Oliva

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