Print Friendly  |  
  • LinkedIn
  • Add to Favorites


 Nursing Care Occupancy Bumps Higher in First Quarter

Amid declines in assisted living and independent living occupancy rates for the first quarter of 2018, the nursing facility sector saw a slight increase as measured by the National Investment Center (NIC) for Seniors Housing and Care.

Overall, the occupancy rate for seniors housing properties reached a six-year low, averaging 88.3 percent in the first quarter of 2018, a decline of 0.5 percentage point from the fourth quarter of 2017 and 0.9 percentage point lower from year-earlier levels. This placed occupancy 1.4 percentage points above its cyclical low of 86.9 percent reached during the first quarter of 2010 and 1.9 percentage points below its most recent high water mark of 90.2 percent in the fourth quarter of 2014, NIC said.

The data showed that nursing care occupancy increased to 86.5 percent in the first quarter of 2018, from 86.2 percent in the fourth quarter of 2017. NIC said the nursing care annual inventory growth rate came in at minus 0.2 percent in the first quarter of 2018, while annual absorption was down by 1.0 percent. Private-pay rents expanded by 2.4 percent on a year-over-year basis, which was down 0.4 percentage point from year-earlier levels.

NIC said it would be watching to see if there is a bounce back in the second quarter of the year for the occupancy rates for independent and assisted living properties, which averaged 90.3 percent and 85.7 percent, respectively, during the first quarter of 2018.

The occupancy rate for independent living was down 0.4 percentage point from the prior quarter and down 0.6 percentage point from year-earlier levels. The occupancy rate for assisted living was down 0.7 percentage point from the fourth quarter of 2017 and down 1.3 percentage points from year-earlier levels.

Beth Burnham Mace, chief economist of NIC, said the quarterly decline for assisted living resulted from a marked slowdown in first-quarter absorption as well as less inventory growth. 

“Winter weather typically causes a slowdown in both inventory growth and demand in the first quarter. This year a particularly harsh flu season may have also slowed leasing activity, as many properties lost marketing days due to flu-related property-level quarantines,” she said.

“We may potentially see a corresponding bounce back in the second quarter as delayed move-ins from the first quarter take place.”

In total, seniors housing’s annual absorption was 2.1 percent as of the first quarter of 2018, down 0.2 percentage point from the fourth quarter of 2017 and down 0.4 percentage point from one year earlier.

NIC said the seniors housing annual inventory growth rate in the first quarter of 2018 was 3.1 percent, unchanged from the fourth quarter of 2017.

During the first quarter of 2018, the average rate of seniors housing’s annual asking rent growth was 2.3 percent, down 0.2 percentage point from the prior quarter and down from a recent high of 3.7 percent in the fourth quarter of 2016.

For comparison purposes, labor expense growth as measured by the annual change in assisted living average hourly earnings was 5.0 percent in the fourth quarter, according to the Bureau of Labor Statistics, the report said.

Find more details at www.nic.org/nic-map/reports.

Facebook.png   Twitter   Linked-In   ProviderTV   Subscribe

Sign In