A “remarkable turnaround” in demand for senior living is benefiting occupancy rates and rent growth, according to a new report from Marcus & Millichap.
The company’s “Senior Housing National Report” for the second half of 2023 covers independent living, assisted living, memory care and continuing care retirement / life plan communities.
Between the second quarter of 2021 and the third quarter of 2023, the report authors said, more than 103,000 units were absorbed on net. “That is more than double the number of doors that were relinquished during the worst of the pandemic, or that were absorbed in the 10 quarters preceding the health crisis,” they wrote.
Meanwhile, occupancy rates are growing across all of the settings. Overall, occupancy during the height of the pandemic was the lowest in assisted living, then memory care, among the four senior living types covered in the report. As of the third quarter, overall occupancy now is highest in memory care, where it is exceeding the pre-pandemic high, followed by assisted living.
Also, rent rates are increasing at approximately double the pace seen before the pandemic — up 6 to 6.7% year-over-year, depending on setting, according to the report.
Operators still face challenges related to lending rates, underwriting, construction costs and labor, the authors noted. Slowed construction activity, however, especially of memory care communities, is boosting near-term property performance, according to Marcus & Millichap.
Read more by downloading the special report here.
