1Q2020 Seniors Housing Actual Rates Report Key Takeaways

June 17, 2020

The NIC MAP® Data Service recently released national monthly data through March 2020 for actual rates and leasing velocity. In this release, NIC also provided data on three metropolitan areas for which there is sufficient data to report upon: Atlanta, Philadelphia, and Phoenix.

A few of the key takeaways from the 1Q2020 Seniors Housing Actual Rates Segment Report at the national aggregated level are listed below. Full access to the reports and other takeaways is available to NIC MAP Data Service clients.

Key Takeaways

  • Average initial rates for residents moving into independent living, assisted living and memory care segments were below average asking rates, with monthly spreads generally largest for memory care, followed by assisted living segments and then independent living segments. Care segments refers to the levels of care provided to a resident living in an assisted living, memory care, or independent living unit.
  • The average discount for the memory care segment was the largest of the three care segments in March 2020 and averaged 10.7% below average asking rates. This equates to an average initial rate discount of 1.3 months on an annualized basis, less than the 1.5 months seen at the end of 2019.
  • As of March 2020, initial rates for assisted living care units averaged 7.6% ($386) below average asking rates. This equates to an average initial rate discount of 0.9 month on an annualized basis, the same as the year-earlier and the year-end 2019 discount.
  • Average in-place rates for residents in independent living, assisted living, and memory care segments were below average asking rates. The discount was smaller for in-place rates than initial rates compared with asking rates.
  • For the assisted living segment, average in-place rates consistently were below average asking rates since reporting began in January 2017. The monthly gap between these rates was 2.3% or $117 in March 2020, the equivalent of 0.3 months. It has averaged 0.4 months over the past 12 months.
  • The rate of move-ins has exceeded or equaled the rate of move-outs for 8 of the prior 12 months for the memory care segment, 5 of the latest 12 months for assisted living segment and 7 of the past 12 months for independent living segments as of March 2020.

The NIC Actual Rates initiative is driven by the need to continually increase transparency in the seniors housing sector and achieve greater parity to data that is available in other real estate asset types. Now more than ever, in the world of the COVID-19 pandemic, having access to accurate data on the actual monthly rates that a seniors housing resident pays as compared to property level asking rates helps NIC achieve this goal. That said, the data reported in this blog post does not reflect the effects of the pandemic, but better serves as a baseline for the conditions that prevailed prior to the coronavirus.

The Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,500 properties across the U.S. operated by 25 to 30 seniors housing providers. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties. Note that this monthly time series is comprised of end-of-month data for each respective month.

The data reported here is on care segment, where care segment type refers to each part or section of a property that provides a specific level of service, i.e., independent living, assisted living, or memory care. NIC also has this data for majority property type, where majority property type refers to which care segment comprises the largest share of inventory. In addition, care segment actual rates data is also available for the Atlanta, Phoenix and Philadelphia metropolitan areas.

While these trends are certainly interesting aggregated across the states, actual rate data is even more useful at the metro level. As NIC continues to work towards growing the sample size to be large enough to release more data at the CBSA level, partnering with leading software providers like Alis, MatrixCare PointClickCare, and Yardi makes it easier for operators to contribute data to the Actual Rates initiative. NIC appreciates our partnerships with software providers and our data contributors and their work in achieving standardized data reporting.

If you are an operator or a software provider interested in how you can contribute to the Actual Rates initiative, please visit nic.org/actual-rates.

About Beth Mace

Beth Burnham Mace is the Chief Economist and Director of Outreach at the National Investment Center for Seniors Housing & Care (NIC). Prior to joining the staff at NIC, she served as a member of the NIC Board of Directors for 7 years and chaired NIC’s Research Committee. Ms. Mace was also a Director at AEW Capital Management and worked in the AEW Research Group for 17 years. While at AEW, Ms. Mace provided primary research support to the organization’s core and value-added investment strategies and provided research-related underwriting in acquisition activity and asset and portfolio management decisions. Prior to joining AEW in 1997, Ms. Mace spent ten years at Standard & Poor’s DRI/McGraw-Hill as the Director of the Regional Information Service with responsibility for developing forecasts of economic, demographic, and industry indicators for 314 major metropolitan areas in the U.S. Prior to working at DRI, she spent three years as a Regional Economist at the Crocker Bank in San Francisco. Ms. Mace has also worked at the National Commission on Air Quality, the Brookings Institution and Boston Edison. Ms. Mace is a member of the National Association of Business Economists (NABE), ULI’s Senior Housing Council, the Urban Land Institute and New England Women in Real Estate (NEWIRE/CREW). In 2014, she was appointed a fellow at the Homer Hoyt Institute and was awarded the title of a “Woman of Influence” in commercial real estate by Real Estate Forum Magazine and Globe Street. Ms. Mace is a graduate of Mount Holyoke College (B.A.) and the University of California (M.S.). She has also earned The Certified Business Economist™ (CBE), which is the certification in business economics and data analytics developed by NABE. The CBE documents a professional’s accomplishment, experience, abilities, and demonstrates mastery of the body of knowledge critical in the field of economics and data analytics.

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