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Seniors Housing Conditions Stabilizing

All sub-segments within the sector are feeling the pain of the downturn, to varying degrees.

By Sule Aygoren Carranza | Updated on June 08, 2009

ENCINO, CA-There are indications that the national downturn is finally affecting seniors housing–a market that has, until now, weathered the storm relatively well. Occupancy levels for independent living, assisted living, skilled nursing and dementia care communities are ticking down, and rising unemployment, shrinking net worth and falling home prices are leading more seniors to opt out of the segment, according to recently released first-half data from Marcus & Millichap Real Estate Investment Services.

Despite all of the negative pressures, seniors housing occupancies are hovering in the low-90% range, and there are signs that demand is starting to stabilize. This bodes well for the segment’s prospects for recovery, the locally based firm reports.

Like with other property segments, a tougher credit environment, along with hesitancy on the part of equity players due to the turmoil in the stock market, has caused investors to pull back dramatically from the market. Total dollar volume fell almost 90% last year to less than $2 billion, and that pace is expected to continue this year.

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