The pace of lease-ups and initial move-ins declined in the long-term care during the pandemic era, but the trend is at a pivot point, according to a new report from NIC MAP Vision.

“Properties of all care segments were negatively impacted by COVID; occupancy and lease-up rates changed across the industry,” NIC MAP Vision Chief Operating Officer Kyle Gardner, told the McKnight’s Business Daily. “Properties that opened in 2022 are showing lease-up results similar to properties that opened before the pandemic, which is a positive sign that the industry is returning to normal.”

Gardner pointed to several factors that affect lease-up rates, including:

  • Depth of target market demographics;
  • Supply;
  • Property size;
  • Quality of and proximity to competition;
  • Condition of the residential real estate market;
  • Consumer familiarity and acceptance of seniors housing;
  • The operator; and
  • Levels of presales before opening.

COVID-19 wreaked havoc on operating playbooks across long-term care, affecting even communities that opened in 2018 or 2019, Gardner said.

“What the data shows is that buildings that opened before COVID basically had to go through two lease-ups right when they first opened,” he noted. Facilities that opened in 2018 or 2019 started their normal lease-up, but the process was disrupted as the pandemic moved in, and then they had to switch gears, Gardner added.

In some ways, he said, properties that opened during the pandemic had an advantage over other properties in that they got to see how others were dealing with additional government regulations and infection control measures.

“Regardless of where the building was located in the country, regardless of the care type, every building was impacted in a pretty similar way in terms of slowing down during COVID and somewhat leading right up to that,” Gardner said.

Skilled nursing facilities have been rebounding more slowly than memory care and assisted living communities, he said. Also, free-standing campuses have marginally better lease-up rates than combined campuses, Gardner added.

He said that he remains optimistic that the rate of lease-ups is heading up, with more progress to be made. After all, Gardner said, an estimated 6 million people will turn 80 in 2025.

“We’ve had a really tough couple of years as an industry, but we’re still behind the total supply needed for that kind of baby boomer entry,” he said. “And so, even though operational difficulties have been more intense recently than we would have liked, if we can persevere the storm a little bit longer and continue to invest, there is a tremendous amount of work for us to do for older Americans in the industry and for investors. There’s still returns to be had.”