Occupancy in the senior housing industry has hit a six-year low, and assisted living occupancy has hit an all time-low, according to new data from the National Investment Center for Seniors Housing & Care (NIC).
Specifically, senior housing occupancy averaged 88.3% for the first quarter of 2018, which is down 0.5 percentage points from the fourth quarter of 2017 and 0.9 percentage points from the year-ago period, the data show.
Assisted living occupancy, meanwhile, averaged 85.7% in the first quarter of 2018, dropping 0.7 percentage points from the prior quarter and 1.3% from the first quarter of 2017.
The slip in assisted living occupancy can be attributed to a combination of slower absorption and less inventory growth, NIC Chief Economist Beth Burnham Mace said in a press release.
“Winter weather typically causes a slowdown in both inventory growth and demand in the first quarter,” she added. “This year, a particularly harsh flu season may have also slowed leasing activity, as many properties lost marketing days due to flu-related property-level quarantines. We may potentially see a corresponding bounce back in in the second quarter as delayed move-ins from the first quarter take place.”
Independent living occupancy fell, as well, averaging 90.3% during the first quarter of 2018. This represents a drop of 0.4 percentage points from the prior quarter and a drop of 0.6 percentage points from the first quarter of 2017.
Inventory growth flat, absorption slows
Senior housing annual absorption totaled 2.1% in the first quarter of 2018, which is down 0.2 percentage points from the fourth quarter of 2017. The senior housing annual inventory growth rate, meanwhile, was 3.1%, or the same as it was during the fourth quarter of 2017.
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“There remains a wide range of inventory growth rates across the primary markets, as five of the top 31 metropolitan markets alone accounted for 35%—more than one-third—of the seniors housing units that came online during the past four quarters,” NIC Chief of Research & Analytics Chuck Harry said in the press release.
Senior housing construction starts within NIC’s 31 primary markets during the first quarter of 2018 preliminarily totaled 3,832 units, which included 1,459 assisted living units and 2,373 independent living units.
Additionally, during the first quarter of 2018, the average rate of seniors housing’s annual asking rent growth was 2.3%, or 0.2 percentage points lower than it was during the fourth quarter of 2017.
Written by Mary Kate Nelson