It’s no secret that senior living providers sometimes give new residents a break on the rent for some period of time. As 2016 came to a close, new assisted living residents were paying a rate that was 10.7% lower than what communities initially were asking, on average, according to recently released data from the National Investment Center for Seniors Housing & Care (NIC).
That initial rate discount equates to nearly 1.3 months’ rent on an annualized basis, NIC Chief Economist and Director of Capital Markets Research Beth Burnham Mace wrote in a blog post Thursday.
Independent living discounts averaged less than half-a-month’s rent as of December 2016, the data show.
“The larger discount seen in majority assisted living properties reflects the relatively weaker conditions in that sector compared with majority independent living properties,” Mace told Senior Housing News. “Occupancy rates have fallen for the overall assisted living sector as new supply has outpaced new demand.”
However, conditions vary by market, with some metro areas experiencing greater supply pressure than others, she emphasized.
Average asking rates climbed in assisted living over the course of 2016, but as of December, the average initial rates being paid were down 1.2% year-over-year.
The picture was rosier in independent living. In December, the average asking rate was up 2.5% year-over-year, and the average initial rate increased by an even greater 2.9%.
Assisted living also is seeing greater turnover than independent living. Assisted living move-outs exceeded move-ins during six of 12 months in 2016. Independent living move-outs exceeded move-ins during five of 12 months last year.
The NIC actual rates data is gathered from between 15 and 20 providers with about 2,500 properties nationwide. NIC began releasing actual rent data for the first time in 2016. The organization previously had reported on asking rents only.
Written by Tim Mullaney