ANNAPOLIS, Md. — The occupancy rate for private-pay seniors housing rose 80 basis points to 85.1 percent in the fourth quarter of 2023, according to data from NIC MAP Vision. It’s the 10th consecutive quarterly increase in occupancy as the industry continues to recover from impacts of the COVID-19 pandemic.
The occupancy figure marks an increase of 730 basis points from the pandemic low of 77.8 percent in second-quarter 2021, but still just shy of the pre-pandemic mark of 87.1 percent in first-quarter 2020.
NIC MAP Vision is a product of the National Investment Center for Seniors Housing & Care (NIC), an Annapolis-based nonprofit firm that tracks industry data gathered from 31 primary metropolitan markets. Private-pay seniors housing comprises independent living, assisted living and memory care.
Fourth-quarter net absorption was more than 8,400 units across the primary markets, the highest quarterly level observed in 2023. Within the 68 secondary markets that NIC MAP tracks, occupancy has even exceeded its pre-pandemic level (84.2 percent) by 120 basis points.
While occupancy and absorption levels are trending upward, higher costs of capital and challenged lending environment conditions continue to weigh on new supply. Seniors housing inventory for the primary markets grew by 0.4 percent or 2,920 units from the prior quarter. Year-over-year inventory growth was 1.4 percent, near its smallest year-over-year increase since 2012.
“At this pace, we anticipate occupancy recovery to pre-pandemic levels in the second half of 2024,” says Caroline Clapp, senior principal with NIC. “If this environment of robust absorption coupled with relatively moderate new inventory continues, owners and operators will need to determine when to jumpstart new construction to meet consumer demand.”
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