Marcus and Millichap recently released its Second Half 2017 National Seniors Housing Research Report, providing seniors housing performance data, as well as their outlook for seniors housing markets. The report can be downloaded from Marcus and Millichap here.
Using NIC MAP data, Marcus and Millichap included this map indicating the top 10 seniors housing construction markets as of second quarter 2017. As is no surprise, the Denver metro area is one of those top 10 markets for new seniors housing construction, continuing a trend over the past few years.
The report provides the following “outlook” overviews for four segments of the seniors housing market: independent living, assisted living (including memory care), skilled nursing, and continuing care retirement communities (CCRC). These are quoted directly from Marcus and Millichap’s report.
Independent Living: Independent living construction remains elevated through the remainder of the year, but healthy absorption keeps occupancy above the 10-year average at 91.3 percent, down 40 basis points from one year ago. Steady demand assists in the average rent rising 2.6 percent this year to $3,101 per month.
Assisted Living: An elevated pace of completions will weigh on occupancy, pushing down the stabilized occupancy rate 130 basis points to 88.5 percent this year. Rent growth will continue to strengthen, and the average advances 3.6 percent to $4,624 per month.
Skilled Nursing Facilities: Occupancy continues its downward slide this year, falling 60 basis points annually to 86 percent. Operators must increase rates to keep up with rising healthcare costs, and a 2.6 percent increase will push the average daily rate to $311 per bed per day.
Continuing Care Retirement Communities: Strong demand pushes up occupancy 60 basis points from the end of last year to 91.5 percent. Rising occupancy encourages operators to increase average rent, which reaches $3,194 per month on an annual advance of 2.9 percent.