Senior living providers are still seeing more potential for assisted living as the senior housing segment’s inventory growth rate reached its highest level since 2007 in the second quarter.
While assisted living growth has continued to climb year over year following the recession, it is continuing on its upward trajectory reaching a new high during the quarter, according to the latest data released by National Investment Center for Seniors Housing & Care Industry (NIC).
But such is not the case for other senior housing property types that have lacked a similar surge post-downturn.
“The resulting rates of inventory growth for independent living and assisted living are quite different — annual inventory growth for independent living registered only 0.5%, while assisted living’s inventory grew by 3.1% and marks its fastest rate of growth ever within the NIC MAP time series, which dates back to 2007,” says Chuck Harry, NIC’s managing director and director of research and analytics, in a written statement.
NIC’s second quarter data shows that the senior housing annual inventory growth rate overall was at 1.5%, an increase of 0.1% from the prior quarter.
Senior housing annual absorption also increased, as it was 2.7% during the second quarter of 2014, up from 2.3% during the first quarter of 2014 and 1.8% during the same period last year.
Previously, NIC projected an increase in assisted living supply and absorption rates for the next few quarters, suggesting that these rates would outpace independent living. As of the first quarter of 2014, NIC leaders expected assisted living inventory growth of about 6,700 units within the following four quarters, or an increase supply of 3.4%.
Alternatively, recent NIC data shows senior housing construction experiencing a marginal decrease: Construction as a share of existing inventory was at 3.2%, 0.1 percentage points below that of the first quarter.
While assisted living properties outpaced independent living in terms of inventory growth, independent living facilities averaged 90.5% occupancy, compared to assisted living’s 89%. The average occupancy rate for all senior housing properties was 89.9% in the second quarter, NIC data shows, up 0.1% from the previous quarter and 1% over the same period in 2013.
Written by Emily Study