Seniors housing investment returns fell in the second quarter as the economic effects of the COVID-19 global pandemic continued to take a toll on the industry. That’s according to the National Council of Real Estate Investment Fiduciaries second quarter real estate investment report released this week. The total investment return for the seniors housing sector was a negative 1% for the quarter, the first negative return in eight years.
The income return remained positive; however, it was the smallest increase on record as far back as 2003, said Beth Burnham Mace, chief economist and director of outreach at the National Investment Center for Seniors Housing & Care. She added that the appreciation return fell 2.04%, the third consecutive quarterly decline, making the valuation return a negative 2.43% since the fourth quarter of 2019.
“Many investors reduced their appreciation expectations in the first half of the year as the impact of the coronavirus weighed heavily on their view of the sector,” Mace noted.
The report reflects the returns of 123 seniors housing properties, valued at $6.3 billion in the second quarter.
In other NIC-related news:
The occupancy rate for majority assisted living properties has dropped by 5.7% since the start of the COVID-19 pandemic, according to an intra-quarterly snapshot released this week by the NIC MAP Data Service. It’s the fifth consecutive month occupancy within the sector as fallen, according to NIC. The drop pushed assisted living occupancy rates to a record low of 79.5%. For the first time since March, however, the 0.6% drop in assisted living occupancy in August was less than the decline in occupancy for majority independent living properties, which dropped 0.8% last month.
Tampa, FL, saw the largest decline in independent living occupancy rates in August, falling nearly 7% from July, to 82.5%. Sacramento, CA, however, saw a slight uptick in occupancy among this sector, jumping to an 88.3% occupancy rate. Overall, independent living occupancy rates fell to 85.6% in August, according to NIC.