Q2 2020 National Senior Housing Quarterly View

An Analysis by Keegan Kelly

COVID-19 HITS SENIORS HOUSING

The combined national vacancy rate for senior housing properties increased dramatically in the second quarter of 2020. Last quarter, the vacancy rate increased by 10 basis points. This quarter, that increase shot up to 220 basis points, putting the sector at a 12.3% vacancy rate at the end of Q2. A steady increase in vacancy has been the trend in the sector for at least the last two years, but the stark jump this quarter can be attributed to COVID-19, and the vulnerability of the tenant base to this pandemic.

 

Aggregate Vacancy Rate

Source: Moody’s Analytics REIS

 

The largest spike in vacancy this quarter was in the memory care subtype at 270 basis points, but all other subtypes experienced considerable hikes as well, from 200 to 240 basis points. In fact, vacancy rates for each of the subtypes have surpassed their highest respective levels since REIS began tracking the specialty sector in 2012. On trend, assisted living and memory care have the highest rates this quarter – reaching highs of 13.6 and 13.8% respectively. Also similar to last quarter, skilled nursing facilities have the lowest vacancy rate, at 11.6% – though it still rose two full percentage points from last quarter’s 9.6%. Independent living finished the
quarter at 12.1%.

 

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Keegan Kelly is an Associate Economist within the commercial real estate division of Moody’s Analytics.

 

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