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Seniors Housing Case Report

Decent Essays

Follow the Curve: Why national trends in Seniors Housing occupancy data should matter to Independent Owners If you even occasionally read any Seniors Housing publication, you would be hard pressed to avoid the topic of the declining industry occupancy statistics published by the National Investment Center for Seniors Housing & Care, Inc (NIC), the preeminent healthcare real estate database and industry advocate. NIC recently released second quarter 2017 data that displayed several interesting points: The largest inventory growth for Seniors Housing in a single quarter since NIC MAP began its reporting in fourth quarter 2005. Seniors Housing occupancy fell to 88.8%, down 50 basis points from the first quarter 2017 and 140 basis points below …show more content…

These changes will find their way into every market – how will independent owners be prepared to react? Absorption and the question of market penetration Much of the decline in occupancy has been attributed to the massive influx of new units brought to the market. Over the previous year, more than 22,000 units were added to the Seniors Housing stock. Of those 22,000 units, only 15,000 have been absorbed to date. The second quarter of 2017 alone brought online approximately 6,000 units – the largest quarterly increase in new units since NIC began collecting data. While stabilized communities (facilities older than two years or if less have already reached 95%+ occupancy levels) continue to show strong occupancy levels (90.4% nationally), the influx of inventory will eventually work its way into affecting occupancy at older stock as newer Seniors Housing residents will have a choice between providers. Capital Listens While acquisition and development capital will always analyze deals on a local level, troubling national headlines relating to low occupancy could cause capital’s purse strings to tighten. Seniors Housing has few publicly available data points, occupancy statistics being one of them. Many investors speculate that we are in the later innings of the investment cycle and all eyes are scanning the horizon for any signs of trouble. Might the recent low occupancy figures be those dark clouds? Institutional

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