John Hartmayer, COO at Waltham, Mass.-based Benchmark Senior Living, tells GlobeSt.com that his portfolio is seeing steady occupancy growth over the past 19 months, during which the company earned a 19-point increase.
"We're now at pre-pandemic occupancy," Hartmayer said.
That type of strong industry performance is also reflected in NIC MAP Vision's data released last week that showed the overall occupancy rate increased 1.0 percentage point from 81.2% in the second quarter of 2022 to 82.2% in the third quarter of 2022.
Occupancy is up 4.3 percentage points as of this quarter from a pandemic low of 77.9% in the second quarter of 2021.
It's the fifth consecutive quarter of increase and is due to a surge in demand that strongly outpaced growth in inventory, NIC said.
Further, the total number of occupied senior housing units within the 31 NIC MAP Primary Markets is just 2,400 units shy of its pre-pandemic all-time high level.
Assisted Living Seeing Greatest Boost
Hartmayer said COVID-19's impact on occupancy was more pronounced at Benchmark as it decided very early in the pandemic to halt new move-ins for the safety of existing residents and employees.
He added that memory care occupancy rebounded the fastest – driven by families in need for this specialized care. "
The return of assisted living move-ins was more gradual but steady," Hartmayer said. "Meanwhile, independent living occupancy was impacted minimally by COVID."
Occupied Assisted Living Units at Highest Level Ever
The NIC MAP Vision report showed that demand has rebounded more strongly for assisted living than independent living, "with another quarter of robust gains pushing the number of occupied assisted living units to their highest level ever in the third quarter across primary markets.
"Because new inventory has been added during the pandemic, however, the overall assisted living occupancy rate has not yet reached pre-pandemic levels."
A 'Marked Slowdown' in Loan Issuance
Beth Burnham Mace, NIC's chief economist, said in prepared remarks that the rise in interest rates being imposed by a more restrictive Federal Reserve monetary policy as well as economic uncertainty has led to a marked slowdown in loan issuance, which suggests we'll continue to see a relatively low pace of development in the next several months.
"The slowdown in construction starts will act as a tail wind and support further gains in occupancy," Burnham Mace said.
Building Bigger to Meet Demand
Bill Wilhelm, President of R.D. Olson Construction, tells GlobeSt.com, "Our work in building senior housing definitely has been on the rise. Our most recent assisted living facility, Clearwater, is opening soon in Glendora, Calif.
"It's larger than most with approximately 100,000 square feet and 117 units. I see that to be the new trend in developments given the increase in need."
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