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Senior Housing as Part of the Continuum of Care
from 2023 Trends Report
by Catalyst
RETIREMENT COMMUNITIES OFFERING A FULL CONTINUUM OF CARE, ALSO KNOWN AS A LIFE PLAN COMMUNITY, GIVE RESIDENTS PEACE OF MIND FOR GUARANTEED HEALTHCARE IF EVER NEEDED:
“Simply stated, senior housing operators influence social determinants of health for hundreds of thousands of older Americans. Operators can help manage chronic illness and keep older adults healthy — they have 24/7 eyes on residents and can systematically monitor changes in conditions. Properly managed, this can result in fewer resident hospitalizations, reduce federal and state-level health care spending, and act as a catalyst for future business opportunities and collaborations. Further, thoughtful care intervention can provide support to the overall health care ecosystem through the support and creation of conscientious awareness and follow-through. And, once senior housing is fully recognized as part of the healthcare continuum, senior housing operators will be able to participate in the revenue streams associated with a capitated risk-sharing model of care.”
2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 42
Tailwinds for Occupancy Recovery
SUPPLY AND DEMAND ARE THE DRIVING FACTORS WITHIN SENIOR LIVING OCCUPANCY:
“Two tailwinds support an ongoing occupancy recovery for senior housing. First, on the supply side, the number of senior housing units under construction in the second quarter of 2022 for the 31 NIC MAP Primary Markets was the fewest since 2015. And that pattern may remain in place — at least in the near term — because senior housing starts [to] continue to linger at moderate levels and remain well below their peaks seen in the 2016–2018 period. This is because rising prices for materials and [emerging trends in] inflation, labor shortages in the building trade industries, and the change in Fed policy of higher interest rates are collectively affecting plans for new development; many projects increasingly do not pencil out for reasonable returns.”
2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 42–43
“Second, demand is also a tailwind for an ongoing improvement in occupancy. Indeed, demand, as measured by the change in occupied inventory or net absorption, was robust in the second quarter of 2022, increasing at its strongest pace ever recorded by NIC MAP Vision except for the post-pandemic boost in demand in the last half of 2021. Since the recovery began in the second quarter of 2021, 78 percent of the units placed back on the market have been reoccupied. As a result of these conditions, the occupancy rate for senior housing — where senior housing is defined as the combination of the majority independent living and assisted living properties — rose 0.9 percentage point during the second quarter of 2022 to 81.4 percent for the 31 NIC MAP Primary Markets. This marked the fifth consecutive quarter in which occupancy did not decline. At 81.4 percent in the second quarter, occupancy was 3.4 percentage points above its pandemic-related low of 78.0 percent recorded in the second quarter of 2021 but was 5.8 percentage points below its pre-pandemic level of 87.2 percent in the first quarter of 2020.”
2023 Emerging Trends in Real Estate® Report — PWC and Urban Land Institute, page 43