Life Plan Community Occupancy Levels Near Record Low, But Beat Industry Averages

Occupancy for life plan communities held steady at 84.4% in the second quarter of 2021, still down nearly 5% compared to the previous year.

And there are notable disparities in the occupancy rates between entrance fee-based life plan communities and their rental counterparts, as well as nonprofit and for-profit campuses.

That’s according to a new analysis from specialty investment bank Ziegler and Lana Peck, senior principal with National Investment Center for Seniors Housing & Care (NIC). The analysis, based on insights from the NIC MAP Data Service, includes data from 1,208 not-for-profit and for-profit entrance fee and rental life plan communities in 140 combined markets.


Overall, life plan community occupancy decreased 480 basis points compared to the second quarter of 2020 and 710 basis points from pre-pandemic levels in Q1 2020. Prior to Q2 2020, overall life plan community occupancy averaged 91% for 22 consecutive quarters. 

The second quarter occupancy rate, however, marks a 10 basis point sequential increase. And the decrease is not as steep, compared to non-life plan community occupancy, which fell to 75.4% in the quarter. Overall senior housing occupancy in the quarter was a record low 78.7%, spurred by an increase in new senior housing inventory.

The tempered decline in life plan community occupancy reflects the segment’s ability to weather pressures stemming from Covid-19. A December 2020 report from Fitch Ratings revealed that a combination of independent living resilience and a strong housing market buoyed performance and are contributing to a stable 2021 outlook.


The Ziegler/NIC report revealed that independent living occupancy in life plan communities fell 3.4% year over year in Q2 2021, to 88.4%. Non-life plan community independent living occupancy, meanwhile, fell to 78.8% in the quarter – a 6.2% dropoff.

Independent living occupancy in life plan communities is nearly 10% higher than its non-life plan community counterparts.

The report revealed a marked difference in the occupancy decreases between entrance fee and rental life plan communities.

Total occupancy among the entrance fee cohort ended the second quarter at 87.3%. This represents a 380 basis point decrease over the second quarter of 2020, but a 30 basis point improvement on a sequential basis.

Rental life plan community occupancy, meanwhile, fell to 79.5% in Q2 2021 – a 630 basis point decrease on an annual basis, as well as a 40 basis point drop from the first quarter of 2021.

The difference in occupancy decreases can be attributed to the strong housing market, which surged throughout the pandemic before slipping in June, due to a combination of limited supply and rising prices. Still, prices remained high, averaging $363,3000 for the month – a 23.4% annual spike.

Residents entering entrance fee life plan communities rely on the proceeds from home sales to facilitate a move, and it is more of a commitment than their rental counterparts, Ziegler President and CEO told Senior Housing News in May.

Occupancy decreased across nonprofit and for-profit life plan communities, but the rate of decline was less in the nonprofit space. Q2 2021 occupancy across nonprofit life plan communities was 86.1%, compared to 90.5% a year ago. For-profit life plan community occupancy, conversely, fell to 79.6% in the quarter, a 590 basis point dropoff.

The occupancy differential between nonprofit and for-profit life plan communities is 6.5%.

Finally, the report revealed a wide disparity in median life plan community occupancy, on a regional basis. Occupancy for life plan campuses in the Mid-Atlantic region averaged 87% in the quarter. The Southwest region trailed all others, with an 80.1% occupancy rate.

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