This coverage of the 2016 National Investment Center for Seniors Housing & Care Fall Conference is brought to you by Mainstreet. As the nation’s largest developer of transitional care properties, Mainstreet specializes in real estate development, value investments and health care. With Mainstreet’s support, SHN is bringing live event coverage of the NIC conference, which draws developers, providers and operators within the post-acute and preventative health care services space.
When it comes to monthly rates, both assisted living and independent living communities are asking for more than what they’re acutally getting. In fact, during the second quarter of 2016, the average assisted living property gave new residents discounts amounting to one month of rent for free.
That’s according to the second-quarter 2016 Seniors Housing Actual Rates Report from the NIC MAP Data Service, the market research arm of the National Investment Center for Seniors Housing & Care (NIC). The inaugural report highlights rate data from about 250,000 assisted living and independent living units within more than 2,500 seniors housing properties across the United States operated by 15 to 20 seniors housing providers.
“The focus of this report was in capturing actual rates,” NIC Chief of Research and Analytics Chuck Harry said during a press briefing Wednesday at the 2016 NIC Fall Conference in Washington, D.C. The report was created as the “result of an awareness during the economic downturn, or the Great Recession, of how truly sticky asking rates proved to be,” Harry said.
Between April 2015 and June 2016, both assisted living and independent living’s average initial rates and average in-place rates were below their average asking rates, with the monthly spreads greater for assisted living properties, the report reveals. As of June 2016, the average assisted living initial rate—$4,797—was 7.8% below the average assisted living asking rate of $5,204. This adds up on an annualized basis to an average initial rate discount equal to just under one month, the report shows.
Meanwhile, the rolling three-month average initial and asking rates for both assisted living and independent living properties rose between June 2015 and June 2016, with the initial rates’ increases slightly outpacing the increases in asking rates for both property types, the report shows.
Resident turnover is significantly higher for assisted living properties than for independent living properties, given their respective paces of monthly move-outs, the report shows.
Additionally, from April 2015 through June 2016, the pace of move-ins at independent living properties was more consistently on par with the pace of move-outs, the report shows. This resulted in a steadier-than-average occupancy rate across independent living properties, compared with assisted living properties.
Minnetonka, Minnesota-based senior housing software company Eldermark Software collaborated with NIC to produce the report.
Written by Mary Kate Nelson