Senior Housing Occupancy Ticked Up Despite Omicron Concerns

Senior housing continued its recovery from pandemic-era troughs in the first quarter of this year, with occupancy ticking up slightly from Q4 to hit 80.6%. 

That’s two and a half percentage points higher than the pandemic low of 78%, according to new NIC MAP Vision data. The Q1 numbers represent the sector’s third consecutive quarter of increasing occupancy and are a welcome sign for owners and investors rattled by ongoing COVID-19 concerns.

“The increase in senior housing occupancy despite the highly contagious Omicron variant is a testament to the success of the COVID-19 vaccines and to the infection control policies operators put in place to keep residents safe,” said Beth Burnham Mace, chief economist and director of outreach for the National Investment Center for Seniors Housing & Care in prepared remarks.

Supply for senior housing and care properties remains low and could be a driver of occupancy growth, NIP MAP Vision analysts note, adding that inventory growth in the first quarter was the weakest in nearly a decade thanks to a lowdown in starts that began in 2020.

 “It takes about two years for a senior housing property to be built and opened, so the low number of units under construction means that supply will likely stay low and support higher occupancy,” said Chuck Harry, NIC’s chief operating officer. “This is a positive trend for the industry as it recovers units vacated during the pandemic.” 

 NIC MAP Vision also notes that 59% of the senior housing units within the primary markets it tracks that were vacated during COVID-19 have been re-occupied. Boston (85.5%), San Jose (84.5%), and Portland (84.4%) led with the highest senior housing occupancy within the markets it surveyed, while Houston, Atlanta, and Cleveland had the lowest occupancy rates. 

Not all senior housing types are faring the same. Occupancy at assisted living properties increased while independent living occupancy ticked down, likely because assisted living is more needs-based and demand is increasing more quickly. Assisted living occupancy is now at 77.9%, up from its pandemic low of 74.2% but still below pre-COVID levels of 84.6%.  Meanwhile, independent living occupancy stands at 83.1%, up 1.4 percentage points from a pandemic low of 81.7% Q2 2021 and below a pre-pandemic 89.7%.