Although continuing care retirement communities (CCRCs, also known as life plan communities) did a better job of maintaining occupancy before and during the pandemic, other areas of senior housing are seeing occupancy levels bounce back faster, according to a new analysis published by specialty investment bank Ziegler.
Occupancy in same-store communities other than life plan communities (same-store meaning that the analysis is comparing the same group of communities’ performance over time) is recovering three times faster than occupancy in life plan communities, according to the analysis, which used National Investment Center for Seniors Housing & Care NIC MAP Vision data for the first quarter of 2022. NIC Senior Principal Lana Peck and NIC Senior Data Analyst Omar Zahraoui were guest contributors to it.
Potential reasons for the occupancy discrepancies between community types, they wrote, include that occupancy in other sectors fell further than that of life plan communities during the pandemic and that there was pent-up demand for higher levels of care. Also, life plan communities typically have larger campuses and differentiated residential environments separated by care/service segment, which allowed operators to mitigate the spread of the coronavirus. Non-CCRCs in the analysis also had a higher proportion of skilled nursing beds (52.3%) compared with CCRCs (26.5%).
Ziegler noted that the assisted living, memory care and skilled nursing segments have been recovering relatively faster than independent living — which comprises 55.9% of total units in life plan communities compared with 14.2% in communities that are not life plan communities.
Between the first quarter of 2020 and the first quarter of 2021, life plan community segments reported slightly smaller occupancy losses than the segments in communities that were not life plan communities, with the largest occupancy loss disparity seen across memory care.
Occupancy in communities other than CCRCs is bouncing back faster than CCRCs, growing by 4.9% but still 7.5% below pre-pandemic levels. Life plan community occupancy increased by 1.2 percentage points from pre-pandemic lows and remained 5.9 percentage points below first-quarter 2020 levels.
Communities other than CCRCs saw an 11.8% decline in occupancy in the first year of the pandemic, whereas CCRCs saw a smaller, 7% dip. Entrance fee life plan communities saw a 9.5% dip in occupancy compared with a drop of 5.8% in rental communities.
In life plan communities, nursing care occupancy fell furthest, from 88.6% to 76.5%, whereas independent living saw the least decline in occupancy, falling from 92.9% to 89%. The pattern was similar for communities other than life plan communities — nursing care saw the most significant percentage point decrease, at 12.7 percentage points, whereas independent living saw the least, at 5.7 percentage points.
In comparison, life plan occupancy rates for the assisted living and memory care segments in the first quarter of 2021 were higher than those same segments in communities that were not life plan communities. The largest differences were in independent living (8.4 percentage points), followed by memory care (8.6 percentage points) and assisted living (7.3 percentage points). The life plan community nursing care segment reported occupancy 2.9 percentage points higher than non-life plan communities.
2021 to 2022 comparison
During the second year of the pandemic, life plan community occupancy remained at higher levels than occupancy at non-life plan communities, but it recovered at a slower pace.
The largest differences in year-over-year occupancy recovery between life plan communities and communities in other sectors were seen in the memory care and assisted living care segments.
Between the first quarter of 2021 and the first quarter of 2022, memory care and assisted living occupancy outside of life plan communities improved by 4.6 and 4.2 percentage points, respectively, although both rates remain below pre-pandemic levels.