SENIORS HOUSING OCCUPANCY FALLS, RENT GROWTH CONTINUES
NIC MAP Data Also Shows Shrinking of Construction Pipeline
Annapolis, Md. – Occupancy rates fell for seniors housing in the first quarter of 2010, while rent growth continued but at a slower pace than seen in the previous two years, according to NIC MAP, a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC). The data for the top 31 metro markets also showed that a significant shrinking of the construction inventory pipeline continues, fueled by a combination of project openings and declining construction starts.
The average occupancy rate fell to 88.0% for seniors housing (both independent living and assisted living properties) during the first quarter of 2010, down from 88.3% in 4Q09. Specifically, the average occupancy rate was 87.9% for independent living properties and 88.1% for assisted living properties in 1Q10. In comparison, the average occupancy rate during 4Q09 was 88.2% percent for independent living properties and 88.4% for assisted living properties.
Independent living supply in the top 31 metro markets totaled 322,225 units in 1Q10, with 283,211 total occupied units. In the same quarter, assisted living supply totaled 174,010 units, with 153,330 total occupied units. The seniors housing inventory has grown 11,826 units during the previous four quarters, while absorption during that time has been 6,108 units.
“We’ve seen a general theme develop over the past few years,” said Michael Hargrave, vice president – NIC MAP. “There’s been erratic absorption over the last four quarters, and inventory growth has outpaced demand, but overall absorption has developed a marginally positive trend.”
In comparison, a long trend of negative absorption for skilled nursing disappeared in the first quarter of 2010 and became marginally positive. Skilled nursing occupancy rates rose to 89.0% in 1Q10, compared to 88.8% in 4Q09. During the previous eleven quarters, demand in this sector had consistently declined. “This was the first quarter of positive absorption in three years,” says Hargrave.
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