Do you know about - Encouraging Signs, Despite Economic retreat - Senior Living Sector's performance Shows Resiliency
Map Pennsylvania! Again, for I know. Ready to share new things that are useful. You and your friends.There's no question that every operator and investor in the senior living space has been impacted in some way by the recession. Fortunately, the most modern data shows signs of resiliency - especially as we get ready to answer these questions from investors: How has occupancy been affected? How about rent growth? What are some of the links between what is happening in the cheaper and the senior living business? How has the business coped compared to other industrial real estate sectors? Here are the answers.
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Occupancy Variables
It's no underground that occupancy rates are down. For independent living, the midpoint occupancy rate stood at 89.7 percent while the first quarter of 2009; it was 91.9 percent a year prior. Since its peak in the first quarter of 2007 at 93.7 percent, midpoint occupancy for independent living has declined 4 percentage points. The slumping housing store has likely played a role in declining independent living occupancy, and Nic investigate and investigate conducted by discrete other groups make that connection. For assisted living, the midpoint occupancy rate in this year's first quarter was 88.3 percent, compared to last year's first quarter when it was 90.1 percent. Since its peak in the fourth quarter of 2006 at 91.6 percent, midpoint occupancy has declined 3.3 percentage points.
Another economic indicator investors are scrutinizing is the fluctuation in employment levels. Operators know that the earnings of adult children is a indispensable feasibility metric for assisted living communities, and employment status is a traditional driver of income. Just as seniors' ability to sell their homes seems to be indispensable to independent living occupancy, data is beginning to propose that changes in the employment rate may be a contributing factor to changes in assisted living occupancy-although more investigate must confirm that.
Steady Rent Growth
The latest data shows clear rent growth over the senior living sector- even if at a somewhat slower rate, and even though some operators are reporting negative rent growth. In the first quarter of 2009, the midpoint year-over-year rent growth for assisted living was 3.1 percent. This was down from 5.9 percent a year earlier and 6.9 percent while its peak in the second quarter of 2007. Independent living had an midpoint year-over-year rent growth of 3.3 percent in the first quarter of this year-compared to 5.2 percent in the first quarter of 2008 and 5.5 percent at its height in the third quarter of 2007.
While the pace of rent growth has slowed, it's important to note that many operators are still able to growth base rents and fees on a year-over-year basis. Most haven't had to reduce rent growth for occupancy, which is what's happening in other industrial real estate classes like multi-family, office, and hotel. Those sectors are experiencing declines in year-over-year rent growth, which suggests they're conceding rates to prop up occupancy. Plus, at a time when record-low occupancy rates are the projection for most industrial real estate classes in 2010 and even into 2011, it is inherent that senior living has already seen much of its occupancy loss. With very few new senior living properties advent online after mid-2010, there could be indispensable upward pressure on occupancy rates throughout the sector.
Construction and Supply
Another spirited spot for operators who are eyeing a dip in their occupancy levels is construction. Building data tracked for the top 100 metro markets shows a dearth of projects beginning construction. Many associates that were doing major improvement prior to the recession have ceased improvement projects, while some have gone as far as laying off their entire improvement staff. As a result-although some provide is still in the pipeline-the senior living sector is going to reach a point with very tiny new provide growth colse to the middle of 2010, and this could stretch into a fairly indispensable period of time. This means you'll see tiny to no competition from new properties beginning sometime next summer.
There are also signs that the general cheaper may exit the recession late this year or early 2010. Plus, Nic Map data already shows signs that occupancy rates may be stabilizing in some markets, even if at lower levels. But there are two caveats that may halt, or even reverse, any stabilization efforts. The first is the continued impact of employment losses, particularly on assisted living. Comprehensive in the United States, the whole of employed citizen continues to decline; however, the pace of these losses has improved since the beginning of the year.
According to the U.S. Bureau of Labor Statistics, in the first quarter of 2009, almost 2.1 million Americans lost their jobs, compared with 1.3 million in the second quarter. The second caveat is the possibility of someone else indispensable shock to the Comprehensive cheaper and, thus, to consumer confidence- however, many financial experts are predicting clear Gdp growth in 2010. And while it appears the cheaper has steadily improved since March of this year, it's still in a brittle state that will be considered monitored by financial experts and investors in the advent months.
Assisted Living Occupancy: Top Metro Markets Beat 90%
Overall, over the 31 largest metro markets, assisted living occupancy has fallen this past year from 90.3 percent in the first quarter of 2008 to 88.3 percent in the first quarter of 2009. Among those largest markets, 22 have fallen below 90 percent occupancy. However, there are nine metro areas that can boast stabilized occupancy above 90 percent in the first quarter of this year. The top four are Boston, Houston, Minneapolis, and New York.
Boston, Ma - 93.5 percent. Down two percentage points from first quarter 2008, Boston has the highest occupancy of the 31 largest metro markets.
Houston, Tx - 92.2 percent. This is an growth of o.65 percentage points since first quarter 2008.
Minneapolis, Mn - 92.1 percent. This is down 1.1 percentage points since last year's first quarter.
New York, Ny - 92.1 percent. This is a decrease of 0.47 percentage points since first quarter 2008. New York is right behind Boston in terms of highest occupancy in first quarter 2009. "Generally, markets located in the northeast have held up better than others while this downturn," says Michael Hargrave, vice president of Nic Map. However, those markets have still experienced occupancy declines. For example, the first quarter 2009 occupancy rate for Pittsburgh, Pennsylvania, was 91.2 percent, down from its cyclical high of 94.6 percent set in the first quarter of 2007.
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