Most continuing care retirement / life plan communities maintained relatively high occupancy rates in the first quarter, with data showing a pattern of stronger occupancy growth in regions reporting smaller increases in rents, according to a new report from the National Investment Center for Seniors Housing & Care.
According to NIC data, 90% of entrance-fee independent living segments reported occupancy rates greater than 80% in the first quarter. Assisted living followed, with 87% of segments reporting occupancy above 80%, whereas 83% of memory care segments and 73% of skilled nursing segments reporting the same, according to a blog post from NIC Principal Omar Zahraoui.
Among rental CCRCs, 81% of assisted living segments reported 80% or greater occupancy, followed by 77% of both independent living and memory care segments and 76% of nursing care segments reporting that level of occupancy.
The trends mirror those recently reported by specialty investment bank Ziegler.
Zahraoui also noted that increases in asking rent appeared to be associated with occupancy rates.
Regions with higher occupancy rates, including the Northeast and Mid-Atlantic, also reported smaller rent growth in the first quarter. In contrast, regions such as the Southeast that reported the highest rent growth had the lowest occupancy rates. The Pacific region was identified as an “outlier” for reporting both high rent growth and high occupancy rates.
Similar patterns were seen over the past two years. Regions with more robust occupancy growth from the first quarter of 2022 to the first quarter of this year reported lower asking rent growth. Regions such as the Southeast that reported the highest rent growth also saw the smallest occupancy gains.
“While many factors, such as local market supply and demand dynamics, availability of options for residents with varying income demographics, the specific property and its amenities, and the perceived value of the unit in comparison to the competition in the area, may influence occupancy levels and growth, this analysis showed that asking rent growth is, in fact, a variable that could influence average occupancy levels overall, as well as occupancy growth or improvements,” Zahraoui wrote.
