Average Nursing Care Occupancy Falls to Record-Low 86.2%

Nursing care occupancy experienced a dip last quarter, according to data released Tuesday by the National Investment Center for Seniors Housing & Care (NIC).

Specifically, average nursing care occupancy fell from 86.6% in the second quarter of 2017 to 86.2% in the third quarter of 2017, the data show. The 86.2% figure is the lowest NIC has seen since it began collecting the data in 2006, NIC Chief Economist Beth Burnham Mace told Skilled Nursing News.

The nursing care annual inventory growth rate totaled 0.3% in the third quarter of this year, and annual absorption fell 0.4%.


Private-pay rents for the sector, meanwhile, increased 2.5% year-over-year in the third quarter of this year, which is still down 0.4 percentage point from levels recorded a year earlier.

At the same time, the occupancy rate for assisted living properties averaged 86.6% during the third quarter of 2017, which is 0.2 percentage points higher than the 86.5% recorded in the second quarter of 2017. At the time, the 86.5% figure represented a record low, according to NIC.

The boost in assisted living occupancy may be due to slower inventory growth and continued strong absorption, according to Mace.


“Assisted living inventory grew by a preliminary 1.1% in the third quarter, less than half the record pace we saw the prior quarter, while net absorption of units remained strong on the heels of last quarter’s record quarterly increase,” Mace said in a press release. “Nevertheless, assisted living occupancy remained low in the third quarter at only 86.6%, showing the effects of inventory growth exceeding demand for nine of the past 12 quarters.”

Occupancy static overall

The occupancy rate for independent living properties, meanwhile, averaged 90.5% during the third quarter of 2017. This represents a 0.1 percentage point drop from the second quarter of 2017 and a 0.6 percentage point fall from the third quarter of 2016.

The average occupancy rate for senior housing properties during the third quarter of 2017 remained unchanged from the second quarter of 2017 at 88.8%.

As of the third quarter of this year, senior housing annual absorption was 3.2%, or unchanged from the second quarter of this year. Still, annual absorption increased 0.6 percentage points from one year earlier, and remained the quickest pace since NIC started reporting the data in 2006.

Inventory growth steady

The senior housing annual inventory growth rate in the third quarter of this year was 4.1%, falling 0.1 percentage point from the second quarter, when it also hit its fastest pace since 2006.

In the third quarter of 2017, current construction as a share of existing inventory for senior housing preliminary remained unchanged from the previous quarter at 6.1%, and was 0.5 percentage points below the recent peak of 6.6%, which was recorded during the third quarter of last year.

Meanwhile, the average rate of senior housing’s annual asking rent growth was 2.7% in the third quarter of 2017, representing a drop of 0.7 percentage points from the second quarter of this year and down from the 3.8% recorded in the third quarter of last year.

“The sustained competitive market conditions across the metropolitan markets likely contributed to the deceleration in the same-store asking rent growth,” Chuck Harry, NIC’s chief of research & analytics, explained in a statement. “While many markets are still in the process of absorbing the units that came online over the past couple of years, the construction pipeline remains at elevated levels even though it too is no longer accelerating.”

Written by Mary Kate Nelson

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