Senior Housing Occupancy Drops to Lowest on Record in Q2, Market Bifurcated

The average occupancy rate for senior housing properties fell to 84.9% as the industry was in the grip of Covid-19 in the second quarter of 2020.

That was a 2.8 percentage point decline from the first quarter, representing the sharpest quarterly decline since the National Investment Center for Seniors Housing & Care (NIC) began tracking this data 14 years ago. The Q2 occupancy rate is the lowest on record, NIC announced Thursday.

Assisted living occupancy decreased 3.2 percentage points to 82.1% in the second quarter, while independent living fell 2.4 percentage points to 87.4%.


While these numbers show that the pandemic has seriously affected the senior living industry, a closer look at the numbers reveals reasons for optimism, NIC Chief Economist Beth Burnham Mace told Senior Housing News.

The worst occupancy loss occurred in April, which was the first full month of the Covid-19 crisis, Mace noted. Since that time, occupancy has declined at a slower rate, according to intra-quarterly data that NIC has been collecting.

Furthermore, the median Q2 occupancy — that is, the midpoint of the distribution — was 88.2%. Looking at the spread, 40% of properties reported an occupancy rate higher than 90%, and 20% of properties reported occupancy above 95%, Mace said. On the other hand, 40% of communities had occupancy lower than 85%, and 28% had occupancy below 80%.


“That means there’s a bifurcation going on in the market, and those properties that went into Covid relatively strong are probably having an easier time of it than those that went in with lower occupancy rates,” Mace said.

That idea appears to be backed up by metro-level data, which shows that previously strong markets such as Sacramento continue to outperform the other primary markets tracked by NIC. The California capital was one of only two markets — the other being Cleveland — to post slight occupancy gains between May and June.

Out of NIC’s 31 primary markets, those with the highest Q2 occupancy were: San Jose (92.3%), San Francisco (89.5%), Baltimore (89.0%), and Tampa (87.5%). Those with the lowest Q2 occupancy were: Houston (78.5%), Atlanta (78.9%), and Las Vegas (81.4%).

Another notable data point, in Mace’s perspective, is that the sharp drop in occupancy that occurred last quarter pushed the industry back to the same number of net occupied units as of Q1 2019. Mace views it as “kind of remarkable” that the setback wasn’t more dramatic, given the breadth of coronavirus-related challenges that senior living providers have faced.

It is possible that the worst is now over, in terms of coronavirus-related occupancy shocks for senior living, she said. It’s an idea backed up by the latest NIC Executive Insights survey data, also released on Thursday, which reflected information collected from 85 providers between June 22 and July 5.

“The shares of seniors housing and care organizations reporting an acceleration in move-ins in the past 30-days — across each of the care segments — is the highest in the time series (March 24 to July 5, 2020), while the shares of organizations reporting deceleration in move-ins is the lowest,” NIC Senior Principal Lana Peck wrote.

However, the virus “has a mind of its own,” and infections are spiking in various areas across the country. Providers continue to face challenges in securing PPE, and while Covid-19 testing has become more accessible, processing times and cost continue to be issues. Until there is a vaccine, uncertainty will persist, Mace emphasized.

Companies featured in this article: