Skilled nursing occupancy continues to trend up across the country, although at a moderating pace. The sector logged the 13th straight quarter of occupancy increases during the second quarter, but the 30 basis point jump was the smallest gain recorded during that stretch, a Marcus & Millichap special report on the skilled nursing sector said.

Overall occupancy was 84% during the second quarter, down 220 basis points from the same point in 2019, and the 63,000 beds absorbed from April 2021 to mid-2024 still trails the 105,000 beds relinquished during the pandemic, said the report. Shrinking supply has bolstered occupancy growth, as national inventory fell by 0.6% for the year ended in June 2024 and 5% over the past seven years.

During the quarter, rents grew 4.1% on steady demand increases and a cutback in supply. Rents increased in every US region by at least 3%, led by the Great Plains and Rocky Mountain areas, which logged the fastest increases amid substantial inventory decreases, said the report. The decrease in supply comes at a time when demand is expected to expand to service aging Baby Boomers. The nation's 70-plus population is set to increase by nearly 20 million people by 2040 to reach 60 million total, which should provide upward occupancy momentum.