NIC Says Senior Housing Occupancy Experiences Largest Decline on Record
Patrick Connole
10/16/2020
New data
from NIC MAP® Data Service (NIC MAP) provided
by the National Investment Center for Seniors Housing & Care (NIC) show
that senior housing occupancy declined 2.6 percentage points in the third
quarter of 2020, from 84.7 percent to 82.1 percent.
NIC said
the continued impact of the COVID-19 pandemic on occupancy is profound, and the
latest numbers mark the second quarter in a row where occupancy fell more than
2.5 percentage points, meaning the senior housing sector is now experiencing
its largest drop in occupancy on record.
Assisted
living and independent living facilities experienced their largest occupancy
drop to date, falling 2.9 percentage points to 79.1 percent and 2.4 percentage
points to 84.9 percent, respectively. Nursing care properties saw a steep
decline to 76 percent occupancy in the third quarter, NIC said.
NIC MAP’s
Intra-Quarterly data show that the occupancy rate for majority assisted living
facilities was down 6.1 percentage points for NIC MAP’s Primary Markets since
March 2020.
Independent
living facilities saw a considerable increase in inventory, posting the largest
gain since early 2009, NIC said.
“This reflects
the relatively robust lending and development environment of 18 to 24 months
ago that supported construction starts back then, and which now are completed
properties entering the market,” said Chuck Harry, chief operating officer of
NIC.
“Construction
starts activity in the third quarter continued to be relatively weak,
reflecting today’s more constrained capital markets.”
NIC said there
are large disparities between occupancy rates across metro areas and
properties. San Jose, Calif. (89.9 percent), San Francisco (87.0 percent), and
Portland (85.5 percent) had the highest occupancy rates of the 31 metropolitan
markets that encompass NIC MAP’s Primary Markets, while Houston (75.9 percent),
Atlanta (77.4 percent), and Phoenix (78.6 percent) recorded the lowest.
Of note, the
occupancy rate for senior housing in the Sacramento area fell 8.6 percentage
points since the beginning of the pandemic to 80.6 percent in the third
quarter, while the Washington, D.C., area saw a smaller 2.2 percentage point
drop to 84.7 percent.
“What
we’re seeing is a barbell effect, where 34 percent of senior housing properties
in the NIC MAP Primary Markets reported occupancies above 90 percent in the
third quarter, while 36 percent reported occupancies below 80 percent,” said
NIC’s chief economist, Beth Burnham Mace.
“The
operators with higher occupancy rates will be able to take on the stress of
COVID-19, while those with lower occupancy rates will be more challenged.”
Read the full report at https://www.nic.org/news-press/senior-housing-occupancy-reaches-record-low-in-third-quarter/.