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‘Bullish, Encouraging’ Data Show Senior Housing Occupancy Up, Bucking Seasonal Trends

Senior housing occupancy rose to 81% in the fourth quarter of 2021, an increase of one percentage point, marking the second consecutive quarter of occupancy growth. 

That’s according to quarterly NIC MAP Vision data released Thursday.

The increase is 2.3 points higher than the pandemic low point of 78.7%.

“This report was really bullish, encouraging, and optimistic,” NIC Chief Economist Beth Burnham Mace told Senior Housing News. “Demand held up despite normal seasonal factors that could have pushed it down.”

In NIC MAP Vision’s primary markets, occupancy rose for assisted living, independent living, and nursing care, though occupancy rates for these markets remain well below pre-pandemic levels.

“Fourth quarter occupancy is often negatively affected by seasonal illnesses (flu),” said Mace in a press release. “But occupancy continued to increase despite the challenges posed by the Delta variant (of Covid-19).”

Protocols put in place to protect residents and staff from coming into contact with the novel coronavirus appeared to help contain the flu in 2021.

“I imagine all the protocols [that] operators put in place related to sanitation and infection guidelines will stay in place,” said Mace.

However, the effects of the omicron variant of Covid-19 remain to be seen, and could be reflected in Q1 2022 data.

In the last quarter of 2021, Occupancy among assisted living communities rose to more than 78%, up from the pandemic low of 75.4%, but below the 84.9% rate recorded before the Covid-19 pandemic.

“Assisted living tends to be more needs-based,” Mace told SHN. “So that makes sense that there was more pent-up demand for the need to move into assisted living [communities].”

Independent living is often more choice-based, which could explain the differing rates of occupancy change.

Independent living occupancy rose to 83.6%, up from the pandemic-low of 81.8%, but below the pre-pandemic rate of 89.7%.

Nursing care occupancy rose to 77.2%, up from the pandemic-low of 74.1%, but below the pre-pandemic rate of 86.6%.

The increases could continue into 2022, according to Mace.

“The fact that we also saw a slowdown in inventory growth and construction activity suggests that occupancy should continue to be supported into 2022,” said Mace.

New inventory growth slowed to 3.2% in the third quarter, which is a dramatic drop from the peak of 5% in 2018.

Despite a slight uptick in the rate of construction in senior housing, the overall rate remains low, which should translate into slower inventory growth, according to Mace.

“And as that happens, that should support occupancy growth,” she said.

But even as occupancy has risen, so too have expenses, particularly related to labor. Rental rates went up 3.2% across primary markets in Q4 20201, the NIC MAP Vision data show, which could indicate that providers have been able to exercise some pricing power to protect margin.

Indeed, the increase in rates reflects comments made by various senior living executives in the last months of 2021. Providers, including Brookdale Senior Living (NYSE: BKD), the largest U.S. operator, were able to raise rates while still maintaining occupancy growth.

The post ‘Bullish, Encouraging’ Data Show Senior Housing Occupancy Up, Bucking Seasonal Trends appeared first on Senior Housing News.

Source: For the full article please visit Senior Housing News

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