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Senior Living Lease-Up Rates Trend Toward Pre-Pandemic Levels — But Many Communities Still Reaching for 80% Occupancy

Senior living communities that opened their doors in 2022 experienced lease-up rates similar to those seen before the Covid-19 pandemic, a positive sign that the senior living industry could be returning to normal. And, that acceleration in lease-up speed was seen nationwide.

This is according to a new analysis by NIC MAP Vision, an affiliation of the National Investment Center for Seniors Housing & Care (NIC).

“We’re actually seeing lease-up rates and occupancy return to pre-pandemic rates,” Kyle Gardner, COO with NIC MAP Vision, told Senior Housing News. “It seems to be accelerating, partly because we have the demographic shift coming in our favor.”

NIC MAP Vision also found that communities that opened in the midst of the pandemic experienced better lease-up than those that opened prior to the pandemic.

Gardner believes this is because communities that were leasing up when Covid hit were disrupted, while those that opened in the midst of the pandemic were able to adjust more effectively and run a different playbook.

However, many lease-up communities still have ground to make up.

Only 3% of communities that opened before 2017 failed to clear the 80% occupancy benchmark. But, for properties that opened in 2017, that percentage jumps to 10%. For communities that opened in 2018, nearly 25% haven’t hit 80%, and nearly half of all communities that opened in 2020 haven’t reached 80% occupancy.

Still, Gardner believes that demand fundamentals and the recent acceleration are reasons to think the industry has weathered the worst of the macroeconomic storm. Despite construction activity and market demographics varying from market to market, the lease-up acceleration was observed across the country, according to Gardner.

And in general, supply-demand dynamics are likely helping. Lenders have been tightening their belts for new senior living construction activity as the U.S. Federal Reserve continues to raise interest rates and consumers reduced their adjusted spending for the second consecutive month.

The increase in lease-up speed is led by skilled nursing communities and followed by assisted living and independent living communities, respectively, emphasizing the demand for needs-based senior living.

NIC MAP Vision only included lease-up data from the first three quarters of 2022, according to Gardner. He added that the organization will continue to analyze and report lease-up data in the coming months.

The post Senior Living Lease-Up Rates Trend Toward Pre-Pandemic Levels — But Many Communities Still Reaching for 80% Occupancy appeared first on Senior Housing News.

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