According to the National Investment Center for Seniors Housing & Care (NIC), the trade group that monitors senior living for owners, operators and investors, the overall occupancy rate in the third quarter of 2018 for communities with a majority of independent living units was 90.2%. This is a historically low rate.
What does this mean for families that are considering moving to a Continuing Care Retirement Community (CCRC, also known as a Life Plan Community)? It means almost nothing. Even though the occupancy rate is historically low as described by some sources, it is an aggregated percentage. Each community has a different occupancy rate.
In addition, “occupancy rate” is too broad of a term to have much meaning for a given family. S3Living finds that seniors are looking for a specific type of unit: a one bedroom, or a two bedroom or some variation of the like. Seniors are relatively inflexible with respect to their space requirements. Therefore, a community could have a higher than average occupancy rate (meaning, not much available) and still have several one bedrooms to lease. For the family looking for a one bedroom many options exist, even though the community may have a high occupancy rate.
A community’s given occupancy rate also fluctuates based on how many new units are available within the community. The inventory of new units that have not been occupied ever before is growing within senior living. The rate at which they are being filled is fine but absorption of these units has not kept pace with the inventory growth. NIC Chief of Research and Analytics Chuck Harry wrote in a press release that, “It’s the fact that the rate of inventory growth has exceeded the absorption of units through this period that has driven the decline in the occupancy rate.”
How does absorption of new units effect the family looking for a CCRC? Absorption describes how fast or slow newly constructed units are occupied. New construction, or rehabilitation of existing units at CCRCs is a tremendous benefit for families looking for CCRCs. Developers are listening to families’ present wants and needs and offering them.
When new inventory exists, families have options. In the greater Philadelphia area, some of our CCRCs are old and outdated. It is extremely encouraging that more and more apartments, townhouses and single-family homes are being offered at our local CCRCs. To search for your new CCRC click here to get started.