Senior housing occupancy should start ticking up over the next 12 months, many commercial real estate (CRE) professionals believe.
The fourth annual Seniors Housing Market Study from the National Real Estate Investor and the National Investment Center for Seniors Housing & Care (NIC) drew responses from 153 CRE pros.
Among these respondents, 65% said that they expect occupancy to increase over the next year. This is a more bullish outlook than respondents had in 2016, when only 56% anticipated rising occupancy.
In July, NIC shared glum occupancy news: assisted living occupancy hit a historic low point of 86.5% on average in the second quarter of 2017, while occupancy for senior housing overall was at 88.8%.
Oversupply has been blamed by providers that have been struggling to maintain occupancy. But not every market has seen a huge influx of new competition, which could explain the survey findings released Wednesday, according to NIC Chief Economist Beth Burnham Mace. Respondents might have been considering local market conditions that they consider favorable, she told NREI.
Respondents rated market fundamentals most favorably in the “South/Southeast/Southwest” region. The “West/Mountain/Pacific” region followed, trailed by the “East” and the “Midwest/East & West Central” region.
High barriers to entry in markets like San Jose, California, have kept these western metros more in balance than in other parts of the country, Mace noted.
Those surveyed are not anticipating a huge occupancy boost; 10.9 basis points is the average increase expected, among those who expect an bump.
The report shows that investors are bullish on senior housing overall, ranking it a more attractive asset class than other property types, as they have since 2014.
Click here to view the survey findings.
Written by Tim Mullaney