Occupancy in senior housing fell 1.1% to 88.7% in April, according to data released Tuesday by the National Investment Center for Seniors Housing & Care. The rate was 1% lower than the prior year, at least in part because of the effects of the COVID-19 pandemic, NIC said.
The skilled nursing sector saw an even greater decline, with a 2.2% drop to 84.7% in April in the primary markets that NIC tracks. The figures convey three-month rolling data on occupancy at properties that are at least two years old or, if newer, have achieved 95% occupancy since their opening.
“I thought it was interesting that we saw a bigger decline in skilled nursing, but I think it makes sense because you have a frailer patient in skilled nursing — they’re there because they have fairly significant medical needs — and the impact of the coronavirus is greater” the frailer the person, Chief Economist Beth Burnham Mace told McKnight’s Senior Living. “The other piece of that drop in occupancy [for skilled nursing] relates to the fact that there haven’t been as many elective surgeries in hospitals, so you didn’t have as much need for rehab.”
Regarding senior housing, which NIC defines as independent living and assisted living (and the assisted living subsector of memory care) combined, more data are needed to see a trend, Mace said. Based on surveys NIC has conducted, however, she said, “I think we’ll still see a pretty significant impact in May, because … a lot of operators have mandated moratoriums on move-ins. That’s going to affect occupancy rates.”
Many operators have had such bans in place for six weeks, she said, “So I think you’ll see that in the data.”
When hindsight of the pandemic is possible, the industry may see that the COVID-19 pandemic delivered a “one-two punch” to long-term care, with a first blow landing harder in settings where residents have greater medical needs, Mace opined.
“That would start with skilled nursing, and then from there, probably memory care. And then from there, maybe assisted living then from there, independent living,” she said.
No sector would be unaffected, however. The second big impact would be in settings that are more choice-based — independent living more so than assisted living, Mace said.
“We saw during the last recession that independent living was more affected by the recession than was assisted living,” she said, speaking of a period that began in late 2007 and lasted until mid-2009. “The causes of the last recession were very different than today — housing got really clobbered — but in independent living, because it was more choice-based, the occupancy rates fell more sharply than they did in assisted living, which is more need-based.”
Anecdotal evidence suggests that COVID-19 may hit independent living harder than assisted living, too, Mace said.
“A lot of operators have been telling me that their queues are starting to build for people wanting to move in [to assisted living] because it is need-based,” she said. “If we follow the trends of what happened last time, then it kind of makes sense, because in assisted living, you have an activity of daily living and you’re at a point that you can’t manage yourself, or your children don’t think you can manage yourself, and you’re going to try to move that along as fast as you can.”
That anecdotal evidence echoes what leaders of real estate investment trusts said on their first-quarter earnings calls over the past couple of weeks. Executives at CareTrust, Healthpeak, New Senior Investment Group and Sabra Health Care REIT, for instance, said that operators have reported a pent-up demand for senior housing — as evidenced by increased calls, leads, virtual tours and move-ins — due at least in part to adult children realizing during the pandemic that their parents may need more assistance than they can provide.
Tuesday’s “Intra-Quarterly Snapshot” is part of NIC’s efforts to provide additional data to help the long-term care industry make informed decisions in the midst of the pandemic, Mace said. The organization’s former quarterly market fundamentals and skilled nursing reports now will be published monthly, and future snapshot reports will contain information beyond stabilized occupancy, she said.