Despite a surprisingly high median occupancy number, the lease-up rate for nursing care units lags behind the other three key asset classes in the seniors housing and care space.
The National Investment Centers for Senior Housing & Care (NIC) found that median occupancy at nursing care units in new properties sat at 92% after 16 quarters of operation — well above recent average occupancy figures in the space overall. But that still fell short, however, compared with median occupancy rates in the independent living, assisted living and memory care segments, which clocked in at 93%, 95%, and 94%, respectively.
“Broadly, data on range of lease-ups by community type and national trend data for seniors housing and care properties can be used in setting pro forma occupancy in new development, studies to support financing, and benchmarking occupancy for non-stabilized communities as they fill up,” NIC researchers Lana Peck, Anne Standish, and Beth Burnham Mace wrote in a blog post on the data.
The data segments refer to the services provided by different units in a facility, Mace, who is the chief economist and director of outreach at NIC, told Skilled Nursing News. As a result, the nursing care numbers include units in facilities that don’t solely provide skilled nursing servicing, such as a continuing care retirement community.
Factors that might affect lease-up rates include property age and size, the condition of the residential real estate market, quality of and proximity to competition, and depth of target market demographics, the authors wrote in the blog post.
Eight quarters after opening, the media occupancy rate for nursing care came in at 87%. The lowest quartile of the communities had 75% occupancy or less, while the highest quartile had a median occupancy rate of 93% or more. Sixteen quarters after opening, nursing care’s median occupancy rate was 92%.
“Those numbers, when I first looked at them I thought that they seemed high, but you need to keep in mind that these are median occupancies and not average,” Mace noted to SNN.
The data came from properties profiled in NIC’s proprietary MAP Data Service, profiling 31 primarily metropolitan areas since the fourth quarter of 2005 and secondary markets since the first quarter of 2008.
Written by Maggie Flynn