The senior residing business’s common occupancy fee ticked up once more within the second quarter of the 12 months, and is now approaching ranges final seen in 2020.
That’s in response to the most recent occupancy report from NIC MAP Imaginative and prescient. In accordance with the report, launched July 11, operators within the 31 major markets that NIC MAP tracks reached a median occupancy fee of 85.9% within the second quarter of 2024, a rise of fifty foundation factors from the primary quarter of the 12 months. The most recent outcomes characterize 12 consecutive quarters of occupancy achieve for the business.
The business is approaching peak occupancy ranges final seen in 2020, earlier than the Covid-19 pandemic disrupted life the world over. Assisted residing occupancy registered at 84.3%, which NIC famous is simply 10 foundation factors from the product kind’s peak ranges in 2020; whereas unbiased residing registered at 87.6%, which is simply 200 foundation factors from its prior peak in 2020 of 89.6%.
Unbiased residing occupancy grew barely sooner than assisted residing occupancy between the primary and second quarters of the 12 months, in response to NIC.
The business’s excessive present demand and decrease charges of recent provide ought to proceed to nudge occupancy up in the remainder of the 12 months, in response to Lisa McCracken, head of analysis and analytics on the Nationwide Funding Heart for Seniors Housing and Care (NIC).
“We’re assured in saying that we challenge occupancy to proceed to extend by the tip of the 12 months. The third and fourth quarters of the 12 months have revealed wholesome demand the previous few years, so we anticipate that to proceed,” McCracken advised Senior Housing Information.
Amongst major markets, Boston, Tampa and Baltimore had the very best occupancy charges at 90.6%, 88.8% and 88.8%, respectively; whereas Houston, Las Vegas and Miami had been the bottom with occupancy charges of 80.9%, 81.1% and 82.6%, respectively.
The variety of occupied senior housing models reached a file within the second quarter at 606,968 models, representing a 4.4% improve within the variety of occupied models in comparison with the second quarter of 2023. The variety of occupied models additionally grew 6,200 between the primary and second quarter of 2024.
Stock development registered at 2,600 new models within the second quarter, or a 1.5% improve in comparison with the identical interval in 2023. On the identical time, the senior residing business has the bottom variety of models below development seen for the reason that third quarter of 2014 and the bottom variety of new development begins seen for the reason that 2009 monetary disaster, with solely 900 new begins reported within the second quarter of 2024.
The shortcoming of senior residing firms to get development financing, together with the price of that capital, are nonetheless large boundaries to new development in senior residing, McCracken mentioned.
A earlier NIC report famous that senior residing firms should develop new communities 3.5 occasions sooner than they’re now to fulfill demand by 2030.
“The excessive rate of interest atmosphere is placing a damper on new development exercise in addition to the power to even acquire development financing,” she mentioned. “There are organizations who’re persevering with to develop, however the numbers are approach down from a number of years in the past. We might want to see some fee reductions earlier than the spigot actually begins to open up in a significant approach.”
