Occupancy Ticks Upward in Fourth Quarter as New Supply, Demand Finally Reach Balance, Says NIC

by Jeff Shaw

ANNAPOLIS, Md. — The occupancy rate for seniors housing across the United States increased slightly in the fourth quarter of 2018, according to the National Investment Center for Seniors Housing & Care (NIC), an Annapolis-based non-profit organization that provides data and analytics on the sector.

Occupancy in U.S. seniors housing properties averaged 88 percent in the fourth quarter of 2018, up 10 basis points from the prior quarter and down 70 basis points from a year ago. Current occupancy is 220 basis points below its most recent high of 90.2 percent in the fourth quarter of 2014. The NIC data is based on the tracking of 15,000 seniors housing communities in 140 U.S. markets.

Perhaps most telling is not the slight change in occupancy, but that the increase was based on the highest absorption of new units since NIC began to track that information in 2006.

“The fourth quarter was the first quarter of the past three years during which the growth in occupied units managed to keep pace with the number of new units that came on line,” says Chuck Harry, NIC’s chief of research & analytics. “In other words, this was the first quarter since the fourth quarter of 2015 during which the consumers’ increased demand for seniors housing kept pace with the increase in the inventory of new units. New demand and new supply during the quarter were on par with each other.”

The nursing care occupancy rate saw an increase, hitting 86.3 percent in the fourth quarter of 2018 from 86 percent in the third quarter of 2018. Skilled nursing saw that uptick from the opposite trend, though: the national inventory growth rate was -0.4 percent, which exactly matched the negative absorption rate in the quarter.

To view the full report, click here: https://info.nic.org/hubfs/NIC_MAP/Data%20Release/4Q18%20Data%20Release%20Webinar/4Q18%20Market%20Fundamentals.pdf

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