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Senior Living Occupancy Hits 81.4% in Fourth-Straight Quarter of Growth 

Average senior living occupancy grew 90 basis points to 81.4% in the second quarter of 2022, representing the fourth consecutive quarter for census growth in the industry.

That’s according to new quarterly occupancy data from NIC MAP Vision. The data — released Thursday — shows that although the industry has not fully recovered from its pandemic lows, operators have made good progress grappling with workforce and supply challenges.

In fact, a little more than three quarters of senior housing units in NIC MAP Vision’s 31 primary markets that were vacated during the pandemic have been re-occupied.

And while there are still some economic challenges on the horizon for senior living operators, other factors, such as high demand and more moderate levels of new development this year, should help buoy census in the quarters to come, according to NIC Chief Economist Beth Mace.

More than 30% of senior living communities tracked by NIC MAP Vision have occupancy rates at or above 90%, while nearly 40% of communities have occupancy rates below 80%, according to Mace.

Across the board, ten of the primary markets have recovered more than half of their pandemic-related occupancy losses.

Boston (86.3%), Minneapolis (85.1%) and Portland (85%) boasted the highest occupancy rates in primary markets while Houston (76.1%), Atlanta (77.8%) and Cleveland (78.2%) had the lowest occupancy rates in the quarter.

As has been the case in previous quarters, not all product types saw the same rebound.

Average assisted living occupancy rose to 78.8% in the second quarter, an increase of 1.1 percentage points from 1Q22; while the independent living sector grew 0.7 points to 83.9% in 2Q22.

“I think it’s important to point out that assisted living, which was hit the hardest by Covid-19, is also recovering a bit faster than independent living,” Mace said.

Despite four straight quarters of growth, independent living and assisted living remain significantly off pre-Covid occupancy levels of 84.7% and 89.6%, respectively.

Supply in senior living did not keep pace with demand in the second quarter, with the industry adding just 3,489 units. That is likely a result of a massive slow-down in construction starts in 2020 which surprised Mace.

In November 2021, NIC MAP data showed that new construction grew at a break-neck pace, something Mace thought could continue into the first two quarters of 2022. But, that hasn’t happened thanks to higher interest rates, inflation and supply chain issues.

The number of senior living units under construction had fallen in 2Q22 to its lowest level since 2015, Mace added.

The data comes amid warning signs that the U.S. could enter a recession soon. While that too could impact demand, Mace highlighted the sector’s longstanding reputation as a recession-resilient industry.

“The good news for the sector is that – least we’ve seen in the past – that assisted living is recession-resilient because it’s a needs-based product,” said Mace.

Quarterly asking rental rates for assisted living units increased at the highest pace since NIC began reporting the data in 2005, leaping up 4.6%, with independent living rates increasing by 3%.

“The costs of doing business have been rising because of inflation and operators are passing along some of those costs to their residents,” Mace said.

The post Senior Living Occupancy Hits 81.4% in Fourth-Straight Quarter of Growth  appeared first on Senior Housing News.

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