4Q2019 Seniors Housing Actual Rates Report Key Takeaways

The NIC MAP^® Data Service recently released national monthly data through December 2019 for actual rates and leasing velocity. In this release, NIC also provided data on three metropolitan areas for which there is enough data to report upon:  Atlanta, Philadelphia and Phoenix. 

Key takeaways from the 4Q2019 Seniors Housing Actual Rates Segment Reports include:

• Average initial rates for residents moving into independent living, assisted living and memory care segments were below average asking rates, with monthly spreads generally largest for memory care, followed by assisted living segments and then independent living segments. Care segments refer to the levels of care provided to a resident living in an assisted living, memory care or independent living unit.
• As of December 2019, initial rates for assisted living care units averaged 8.1% ($414) below average asking rates. This equates to an average initial rate discount of 1.0 months on an annualized basis, the same as the year-earlier discount.
• The average discount for the memory care segment was the largest of the three segment types and averaged 12.3% below average asking rates. This equates to an average initial rate discount of 1.5 months on an annualized basis. In October 2019, the discount was the same.
• Of the three metropolitan markets for which NIC MAP is currently reporting data (Phoenix, Philadelphia and Atlanta), the largest discounts occurred in Atlanta in December 2019. As of December 2019, initial rates for assisted living segments in Atlanta averaged 16.3% below their average asking rate, which equates to an average initial rate discount of 2.0 months on an annualized basis, up from 1.3 months one year earlier. This was higher than the comparable discount of 1.0 month for the nation and 0.4 month for Philadelphia. Moreover, in Atlanta, the average discount for independent living segments was slightly more than assisted living and equivalent to 2.1 months in December.
• Higher discounts in Atlanta make sense, since that market had the second lowest seniors housing occupancy rate of the 31 Primary NIC MAP markets in the fourth quarter of 2019 (82.7% versus 88.0% for the Primary Market average), as well as the third-highest share of construction versus inventory (12.1% versus 6.7% for the Primary Market average).
• At the national level, average asking rates for residents moving into independent living, assisted living and memory care segments were above in-place rates, with monthly differences generally largest for assisted living, followed by memory care segments and then independent living segments.
• Average asking rates for the independent living segment exceeded in-place rates since March 2018 and the monthly gap between these rates was 3.4% or $119 in December 2019.

The NIC Actual Rates initiative is driven by the need to continually increase transparency in the seniors housing sector and achieve greater parity to data that is available in other real estate asset types. Now, more than ever, in the world of the COVID-19 pandemic, having access to accurate data on the actual monthly rates that a seniors housing resident pays as compared to property level asking rates helps NIC achieve this goal. That said, the data reported in this blog post does not reflect the effects of the pandemic, but better serves as a baseline for the conditions that prevailed prior to the coronavirus.

This Seniors Housing Actual Rates Report provides aggregate national data from approximately 300,000 units within more than 2,500 properties across the U.S. operated by 25 to 30 seniors housing providers. Note that this monthly time series is comprised of end-of-month data for each respective month. The operators included in the current sample tend to be larger, professionally managed, and investment-grade operators as we currently require participating operators to manage 5 or more properties.

While these trends are certainly interesting aggregated across the states, actual rate data is even more useful at the CBSA level. As NIC continues to work towards growing the sample size to be large enough to release more data at the CBSA level, partnering with leading software providers like Yardi, PointClickCare, Alis, and MatrixCare makes it easier for operators to contribute data to the Actual Rates initiative. NIC appreciates our partnerships with software providers and our data contributors and their work in achieving standardized data reporting.

If you are an operator or a software provider interested in how you can contribute to the Actual Rates initiative, please visit nic.org/actual-rates.

Learn more about the NIC MAP^® Data Service.