Continuing care retirement communities will be the only segment of senior living and long-term care to see increased occupancy in 2018, according to commercial real estate investment sales, financing, research and advisory services firm Marcus & Millichap.
The stabilized occupancy rate for CCRCs has increased 30 basis points to 91.5% over the past 12 months and has stayed in the low 90s for the past 10 years, according to the company’s senior housing research national report for the first half of 2018.
“Rent growth remains strong, with the average advancing 3.2 percent to $3,322 per month in 2018,” the authors wrote about CCRCs, also known as life plan communities.
Independent living is the big draw in these communities, where many operators are reducing the number of skilled nursing beds, according to the report.
Generally speaking, demand for independent living units will remain “intense” in 2018, the authors said, whereas inventory growth in assisted living is greater than demand.
Overall, according to the report, demand for seniors housing may increase as older adults start anticipating the effects of the Tax Cuts and Jobs Act.
“A healthy housing market and benefits from itemizing housing-related expenses, like mortgage interest payments, fall under the new rules that could entice additional seniors to sell homes and use the proceeds to live in smaller, age-restricted housing communities,” the authors wrote.
The appeal would coincide with the decrease in homeownership among those aged 75 or more years over the past four years, Marcus & Millichap said.
Read the whole report here.