Senior living occupancy fell slightly to 87.7% in the first quarter, according to new data from the National Investment Center for Seniors Housing & Care’s NIC MAP data service.
The effects of the COVID-19 outbreak are not evident in NIC’s data yet, but in a recent executive survey of industry leaders by the organization, one-half to two-thirds of senior living and care organizations reported no change in March aggregate occupancy rates.
“Data from the first quarter will be an important benchmark moving forward in these unprecedented times, with occupancy and construction starts challenged by circumstances beyond anyone’s control,” NIC Chief Operating Officer Chuck Harry said in a statement.
Among specific sectors, the occupancy rate for independent living decreased in the first quarter to 89.9%, and assisted living occupancy decreased to 85.3% but remained higher than its recent record low of 85.1% one year earlier.
“The deceleration in assisted living property construction starts foreshadows a further slowdown in new senior housing development associated with the effects of the COVID-19 pandemic,” NIC Chief Economist Beth Mace said in a statement. “Many finance and capital providers are waiting for more clarity on how the pandemic will play out to understand what impact it will have on the broader economy.”
Senior living could be well-positioned to withstand the challenges posed by COVID-19, according to a report released Thursday by Marcus & Millichap.
Assisted living occupancy could be aided by the hospitals’ desire to discharge patients to make beds available for people with the disease and by recognition from adult children that they are unable to care for their elderly parents in a time of crisis, the authors said. They added, however, that “[t]he outbreak has illustrated how many communities are not positioned to provide additional levels of medical care, which could place the sector under scrutiny as oversight has historically been relaxed.”
Memory care communities may be best positioned to withstand an economic downturn, due to the specialized care they offer, according to the report, although in the near term, occupancy could decline as the pace of tours and move-ins slow down.
Independent living communities may be the least exposed to disruption, the authors said, because their residents are relatively young and need little to no assistance with activities of daily living or medical care.