NIC Notes

Insights in Seniors Housing & Care

By: NIC  |  June 05, 2019

An Update on Actual Rates

Seniors Housing

The NIC MAP® Data Service recently released national monthly data through March 2019 for actual rates and leasing velocity. 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 classes. Having access to accurate data on the monthly rates a seniors housing resident pays as compared to asking rates helps us achieve this goal.

Key takeaways from the 1Q2019 Seniors Housing Actual Rates Report include:

  • Average initial rates for residents moving in were below average asking rates for both majority independent living and majority assisted living properties, with monthly spreads generally larger for majority assisted living properties dating back to April 2015.
  • As of March 2019, initial rates for majority assisted living properties averaged 6.9% below their average asking rate, which equates to an average initial rate discount of 0.8 months on an annualized basis, down from 1.0 months in December 2018. The average discount for majority independent living properties was larger at the equivalent of 1.0 month which was as high as it has been since early 2018. This was notable because the discount has been smaller for independent living than assisted living for nearly the entire time series that began in April 2015.
  • Average asking rates for majority independent living properties have exceeded in-place rates for the past eleven months, a change from the prior 14 months (I.e. March 2017 to April 2018) when asking rates were less than in-place rates. For majority assisted living properties, average asking rates consistently exceed average in-place rates. The average majority independent living asking rate increase in March 2019 was 4.0% above its year-earlier level, a slowdown from 5.8% at year-end 2018. The annual pace of growth for majority independent living initial rates also decelerated and was only up 2.8% from year-earlier levels; this followed four months of 5.0% or better growth.
  • For majority assisted living properties, annual growth was strongest for initial rates as of March 2019, at 4.8%. This compares with 2.7% for in-place rates and 2.3% for asking rates.
  • The rate of move-ins has exceeded or equaled the rate of move-outs for six of the past twelve months for majority independent living. For assisted living, move-ins exceeded or equaled moveouts for seven of the past twelve months, while they were below move-outs for five months. Move-ins tend to exceed move-outs during the Spring and Summer months.

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 will be even more useful when it is available at the CBSA level. As NIC continues to work towards growing the sample size to be large enough to release data at the CBSA level, partnering with leading software providers like MatrixCare, Yardi, PointClickCare and Eldermark 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. Operators contributing data not only receive the national report free of charge but they are also helping to increase transparency for the benefit of the sector.

If you are an operator or a software provider interested in how you can contribute to the Actual Rates initiative, please contact Brian Connolly at bconnolly@nic.org.

 

About NIC

For nearly 25 years, the National Investment Center for Seniors Housing & Care (NIC) has been committed to advancing the quality and availability of seniors housing and care options for America's elders — the demographic cohort of age 75-plus totaling 19.2 million and a sector with a market value of approximately $330 billion — through research, education and increased transparency that facilitate informed investment decisions, quality outcomes and leadership development in seniors housing and care.

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