The life plan community sector broke 90% average occupancy in the third quarter of 2023, a total that was nearly 6% greater than the wider senior living industry.
That’s according to a recent life plan occupancy update from Ziegler Investment Banking. Life plan community average occupancy sat at 90.5% in the third quarter, representing yet another quarter of higher occupancy than the wider senior living industry, which sat at 84.4% in the same period.
Life plan community average occupancy in the third quarter was about 6.3% higher than the current rate of non-life-plan independent living communities, 4.4% higher than assisted living and 3.1% higher than memory care.
Occupancy changes were greater for non-life-plan communities compared to their life plan counterparts, with the greatest changes seen in memory care, according to the report. Between 3Q22 and 3Q23, there was a 3.5% increase in occupancy for memory care, 3.2% increase for nursing care, 3% increase for assisted living and 2% increase for independent living across non-life plan communities.
Life plan communities, on the other hand, saw lower occupancy growth, with the greatest increase being a 2.4% increase for nursing care and the lowest being 1.1% growth for independent living.
The report’s author, Omar Zahraoui, told Senior Housing News LPCs largely maintained higher occupancy rates due to more limited construction activity and supply growth within the sector, coupled with demand and occupancy rates contracting less severely than non-LPCs during the Covid pandemic’s peak.
Both life plan communities and non-life plan communities raised resident rents in 2023, which Zahraoui noted remains consistent.
Life plan communities on average grew independent living resident fees by 4.2% in the third quarter compared to the same period a year prior, averaging $3,862 in monthly rent. Non-life-plan communities, on the other hand, grew independent living resident rent by 5.3% in the same period, averaging $3,820.
For life plan communities, memory care rates grew at the fastest clip with growth of 5.8% in the quarter, averaging $8,341. For non-life-plans, assisted living represented the fastest-growing segment for resident rates, rising 5.7% to $6,083 during the period.
The latest report from Ziegler comes as life plan communities continue to see higher occupancy rates than their non-life-plan counterparts. Recent data from NIC showed that life plan communities were “significantly safer” for older adults than non-congregate-living older adults once Covid vaccines were rolled out in 2021.
And despite a more dire outlook at the start of 2023, life plan communities and CCRCs are looking to 2024 with more optimism thanks to favorable conditions.
“I anticipate that the strong market fundamentals – characterized by strong demand and limited new supply – will continue,” Zahraoui said. “However, this must be viewed within the context of a ‘higher-for-longer’ interest rate environment, which may present both challenges and opportunities for the sector. Operators who can effectively assess and embrace these changing trends, adapt with agility and drive innovation will undoubtedly experience remarkable growth and success in the future.”
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