Memory care communities have seen the most inventory growth, and suffered the largest occupancy decline, in the time since the senior housing market last peaked.
That market peak occurred in the second half of 2014, when occupancy rates for the overall senior housing sector hovered around 90%, according to data shared in a Wednesday blog post from the National Investment Center for Seniors Housing & Care (NIC). Since that peak, occupancy has dropped, reaching 87.9% in Q2 2018. That’s the lowest point in seven years.
Occupancy has been suppressed in part by new supply coming online in markets across the country, which is outpacing demand.
The memory care segment—that is, buildings where a majority of units are devoted to memory care—has seen inventory growth of 33.6% since the latter half of 2014.
That compares with inventory growth of 5.7% in independent living and 11.5% in assisted living.
“It is worth noting, however, that the inventory base of memory care is relatively small, which can partially explain the large inventory growth rate of 33.6%,” NIC Senior Principal Lana Peck wrote in Wednesday’s blog.
The overall memory care occupancy rate has declined from 87.8% to 82.7% since the last market peak.
Occupancy in independent living has dropped just slightly, from 91% to 90.7%. In assisted living, occupancy declined from 90.2% to 86.7%.
Memory care woes have been well-noted of late, with some standalone memory care operators struggling to fill units. Some of these operators, such as Anthem, have recently found a surer footing. Industry-wide, however, operators and owners continue to report that new competition is putting a dent in occupancy across various levels of care.
Written by Tim Mullaney