Overall, the third-quarter occupancy rate for continuing care retirement communities / life plan communities continued to outpace that of non-CCRCs across all care segments, according to recent analysis from the National Investment Center for Seniors Housing & Care.
The difference could be seen greatest in the independent living segment, which saw a difference of 6.3 percentage points between CCRCs and non-CCRCs — that is, organizations that offer traditional stand-alone nursing care, assisted living and/or independent living — according to the data. The difference for assisted living was 4.4 percentage points; for nursing care, it was 1.2 percentage points.
Based on data from 1,164 not-for-profit and for-profit entrance-fee and rental CCRCs, the independent living segment of those communities had the highest occupancy (90.5%) in the third quarter, followed by their collective assisted living (87.5%) and memory care (86.5%) segments.
“In terms of occupancy improvements from one year ago, the largest occupancy gains for both CCRCs and non-CCRCs were seen across memory care and nursing care segments, while the smallest gains were seen across independent living segments,” NIC Principal Omar Zahraoui wrote in a blog post.
Highest occupancy regions
Occupancy rates in the third quarter for not-for-profit CCRCs were strongest in the Mid-Atlantic (92.2%), Northeast (91.5%) and Pacific (89.1%) regions of the country, with the Southwest region lagging behind the rest of the country with 86.1% occupancy.
Among for-profit CCRCs, the strongest occupancy rates were in the Pacific (90.9%), Mountain (86.9%) and Mid-Atlantic (86.8%) regions. The Southwest region had the lowest occupancy, at 82.1%.
Entrance-fee versus rental CCRCs
Entrance-fee retirement communities had higher occupancy rates than rental CCRCs across all regions. The most significant difference between entrance fee and rental occupancy was reported for the West North Central region, where entrance fee CCRC occupancy was 5.4 percentage points higher than rental, followed by the Mountain (4.9 percentage points) and the Southeast (4.8 percentage points).
Entrance-fee CCRCs in the Mid-Atlantic, Northeast and Pacific regions all demonstrated occupancy at 90%. The lowest entrance-fee CCRC occupancy was in the Southwest region at 86.0%.
Rental CCRCs in the Mid-Atlantic, Northeast and Pacific regions had the highest occupancy rates, ranging from 87.4% to 88.7%; the Southeast region had the lowest occupancy rate of 82.6%
“The strong market fundamentals — characterized by strong demand and limited new supply — will likely continue through 2024. 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,” Zahraoui said.
“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,” he added.
