Senior living professionals are more confident in the viability of the traditional continuing care retirement community (CCRC)/life plan community model today than they were before the Covid-19 pandemic.
However, the picture is complicated by the fact that many industry pros believe that entrance-fee communities are less attractive today than they were in 2019.
That’s according to findings released Thursday from the 2021 State of Senior Living survey from architecture and design firm Perkins Eastman. The survey gathered input from executive leaders and other workers with senior living provider companies, as well as industry consultants. The majority of respondents — 85% — primarily worked at or with a not-for-profit organization.
When asked if the entry-fee CCRC model is endangered, 44% of respondents said yes and 56% said no.
In three previous surveys, a majority of respondents had said that entry-fee CCRCs are endangered.
The increased confidence in the CCRC model makes sense, given how these communities have weathered the pandemic.
CCRCs and life plan communities have consistently reported higher occupancy rates than other types of senior living communities.
In the first quarter of 2021, life plan community occupancy stood at 84.3% across the primary and secondary markets tracked by NIC MAP Vision, according to data also released on Thursday, separate from the Perkins Eastman report. Non-life plan community occupancy averaged 74.9% in Q1 2021.
Nonprofit CCRCs/life plan communities fared even better, with average Q1 2021 occupancy of 86.1%.
The strong performance of CCRCs during the pandemic will likely be “discussed for years,” according to Eric Mendelsohn, CEO of real estate investment trust National Health Investors (NYSE: NHI).
The large campuses may have helped with social distancing and infection control; the resident base may have been younger and healthier than in other settings; and the strength of the housing market, supporting home sales to fund entry fees, all might be contributing factors, Mendelsohn postulated during an appearance on SHN+ TALKS.
Yet, another finding from the Perkins Eastman survey is confounding.
In 2019, only 13% of respondents said that entrance-fee CCRCs had become “less attractive” than they were previously. But in 2021, 35% of respondents said entrance-fee CCRCs have become less attractive.
Respondents might believe that CCRCs and life plan communities have taken a reputational hit due to bad press during the pandemic, but that resulting negative sentiment will be short-lived, the report authors suggested.
Or, respondents might believe that — while entry-fee communities are less “endangered” today than they were in 2019 — they do face increased competition from alternative models, such as rental communities. This hypothesis is supported by comments that some senior living executives have recently made to Senior Housing News.
Ohio Living, for example, has introduced more rent-based options over the last three years.
“The rental model is going to be more in demand going forward and in our product offering,” Ohio Living CEO Larry Gumina told SHN last winter.
Other findings from the Perkins Eastman survey include:
— Independent living/assisted living hybrid communities are seen by 46% of respondents as more appealing than previously
— Almost 70% of respondents said “apartments for life,” in which residents can age in place as their needs increase, are more appealing than in the past
— 80% of respondents said “new operational measures to address the spread of disease” is a long-term trend
— The majority of respondents believe that loss of revenue due to pandemic-related restrictions and concerns will be a short-term trend
— 55% of respondents said that increased operational costs — including for PPE and new staff hires — is a long-term trend