Assisted Living, Memory Care Operators Have ‘Distinct Advantage’ to Increase Penetration Rates

The continuum of care in senior living is driving evolution of the industry’s basic penetration rates – and operators of assisted living and memory care communities may be better positioned to increase them.

That’s according to a recent analysis of senior living penetration rates from the National Investment Center for Seniors Housing and Care (NIC).

Occupied penetration rates for independent living were 4.3% in 2017, but fell to 4% in 2020, where they have remained since. Assisted living penetration rates fell to 3.6% in 2020 before rising back to 3.9% in 2023. Within memory care, market penetration rates in primary markets was 1.4% in 2023, which was 0.2% higher than what was recorded in 2020.


Memory care and assisted living units recovered more quickly than independent living despite seeing the largest loss of demand in 2020, and NIC Principal Omar Zaharoui notes that those units could have a leg up in growing penetration rates the years ahead.

“Senior housing operators could focus on understanding the shifting trends in occupied penetration rates across segments and different markets,” Zaharoui wrote in an emailed statement to SHN on Wednesday. “This includes recognizing the impact of the continuum of care on demand and growth in senior housing. The data suggests that there is a trend of demand and growth driven by the continuum of care.”

The reason why lies in the fact that they are needs-based, with a built-in “consumer pool of millions who have chosen to move to a senior housing setting and are currently part of the continuum of care.” Assisted living and memory care residents tend to fit into two groups: Those who are transitioning from another community, and those coming from non-congregate settings like a single-family home.


“When considering penetration rates—a metric that generally reflects preferences among older adults—distinguishing between those who prefer aging in a community versus those who opt for aging in place, assisted living and memory care have a distinct advantage,” Zaharoui wrote. “They are both considered needs-based, and services are often required. “

“This existing consumer base is likely to contribute to improvements in occupied penetration rates for these segments in the future,” Zaharoui added.

Cities that had the highest penetration rates between 2017 and 2023 included: Minneapolis (21.6%), Kansas City (14.4%), Phoenix (12.1%), Washington, DC (11.1%), Detroit (10.1%), Cleveland (10.1%), and New York (4.3%), the report said.

Markets that reported declines in occupied penetration rates since 2017 include Portland, Seattle, Baltimore and San Jose.

“These variations in occupied penetration rates may result from a variety of factors, including specific cultural differences in certain markets i.e., cultural views and financial support towards aging in place vs. aging in a community, which could be challenging to influence, or they could be tied to factors that are easier to impact,” Zaharoui wrote.

Upcoming NIC research will look into the many factors that drive high versus low senior housing occupied penetration rates to “uncover hidden patterns and correlations at the market level,” Zaharoui told SHN.

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