An NIC Map Vision summary of the fundamentals of the senior housing industry reports that key metrics are still well below pre-pandemic levels, but trends are positive.
Segmenting the market
The senior housing market is highly fragmented, with NIC Map Vision dividing properties into market segments by the type of units comprising the majority of those on the property. Unit types they consider are: independent living (IL), assisted living (AL) and nursing care (NC) units.
Q4 shows improvement
The NIC Map Vision summary gives a quarterly snapshot of the current state of the market for senior housing by reporting on data collected from the top 31 metro markets. The brief discussed here is a freely distributed extract from a more detailed report that is available to their paying clients.
In Q4, occupancy continued to recover from the low point it reached early in 2021. At the onset of the pandemic, occupancy for IL properties fell around 8 percentage points and occupancy for AL and NC properties fell around 10 percentage points. The latest occupancy figures are well above these lows but remain about 5 percentage points below their levels in late 2019.
NIC Map Vision reported occupancy in Q4 2022 was 85.2 percent for IL properties, 80.7 percent for AL properties and 80.0 percent for NC properties. Occupancy for IL properties is up 50 basis points (bps), occupancy for AL properties is up 100 bps and occupancy for NC properties is up 70 bps from the rates reported last quarter.
NIC Map Vision reported positive annual rent growth for the three senior housing market segments, with rents rising 4.5 percent for IL properties, 5.5 percent for AL properties and 3.3 percent for NC properties. These rates of rent growth are up from those NIC Map Vision reported for Q3.
Cap rates, when measured on a rolling 4-quarter basis, were reported to be 5.8 percent for IL and AL properties, down 20 bps from last quarter but up 40 bps from Q1. The cap rate was not available for NC properties in the Q4 report, but the price per unit was up 1.1 percent for the quarter. Transaction volume for IL and AL properties was $613 million, down 55 percent from Q3.
The NIC Map Vision report is available here.