Independent Living Occupancy Outlook Dims

Independent living is currently the most attractive senior housing sector in which to invest, followed closely by memory care, according to the Q2 2017 Senior Housing Sentiment Report from Senior Housing News. However, industry insiders appear to be readjusting their expectations for independent living occupancy.

For the survey, SHN polled senior housing operators, builders, developers, investors, real estate professionals and C-suite executives in April 2017, receiving 278 responses.

About 36% of the survey respondents believe that independent living is currently the most attractive senior housing category in which to invest. Another 32% of respondents feel that way about memory care, 23% feel that way about assisted living and 4% feel that way about skilled nursing.

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Last quarter, 41% of respondents said independent living was the most attractive senior housing category in which to invest.

Different senior housing sectors are expected to fare better than others this year in terms of occupancy, the survey revealed.

About 57% of respondents believe that memory care occupancy will increase in the next six months. Approximately 38% believe independent living occupancy will increase, down significantly from 47% in the first quarter. Another 38% believe assisted living occupancy will increase.

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This year will likely be a busy one for mergers and acquisitions, survey results indicated.

About 48% of respondents said that their organizations plan to buy senior housing assets in the next six months. That’s up from the 41% of respondents who shared that sentiment in the first quarter of 2017.

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Only 10% of respondents, meanwhile, said their organization plans to sell senior housing assets in the next six months, and the remaining 42% said their organizations plan to hold onto all of their assets.

Concerns about supply still ring loudly in the industry, as well.

Approximately 44% of respondents believe that there’s currently too much senior housing development taking place, though 40% believe that the “right” amount of development is occurring.

Notably, oversupply fears may be increasing, as just 39% of respondents said they there’s too much senior housing development taking place in the first quarter of 2017.

Written by Mary Kate Nelson