Q1 2020 National Senior Housing Quarterly View

An Analysis by Shan Ahmed


The combined national vacancy rate for senior housing properties increased yet again in the first quarter of 2020. Last quarter, the vacancy rate increased by 40 basis points. This quarter, the increase was a milder 10 basis points, putting the sector at a 10.1% vacancy rate at the end of Q1. While there have been one or two quarters with flat or declining vacancy rates, increasing vacancy rates have been a trend in the senior housing sector for at least the last two years. On a year-over-year basis, the vacancy rate is up 50 basis points; the vacancy rate was 9.6% at the end of 2019 Q1. Assisted and independent living facilities both had 40 basis point vacancy rate increases this quarter, while memory care and skilled nursing facilities had declines of 10 and 20 basis points, respectively. As usual, assisted living and memory care facilities have the highest vacancy rates, at just over 11%. In past quarters, we have seen independent living facilities consistently have the lowest vacancy rates, but this quarter skilled nursing facilities had slightly lower vacancy rates. Independent living properties finished the quarter with a 9.7% vacancy rate, and skilled nursing facilities ended the quarter at 9.6%.


Aggregate Vacancy Rate

Source: Moody’s Analytics REIS


Since it is the first quarter of the year, we can expect some rent adjustments at senior living properties. Sure enough, asking rent grew by 1% to 1.1% across care types this quarter. Rents for senior housing properties are increased in the first quarter of the year, and adjustments for the rest of the year are relatively trivial. Given this pattern, we can expect rents to grow from 0.2% to 0.4% next quarter, depending on the care type…


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Shan Ahmed is an Associate Economist at Moody’s Analytics REIS.


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