The seniors housing and care industry continues to show signs of stability and recovery, particularly for independent living, assisted living, and CCRCs. But that trend doesn't necessarily hold true for the skilled nursing sector.

Every quarter since 1999, the nation's leading senior living lenders, owners/operators, and appraisal professionals have reported their key financial and performance data to the National Investment Center for the Seniors Housing & Care Industry (NIC). The information is then posted as the NIC Key Financial Indicators[TM] on www.NIC.org and accessed free of charge.

For the third quarter of 2005, these indicators showed that loan volume rose to more than $1.2 billion--the highest amount ever tracked by NIC. At the same time, the percentage of performing loans also ticked up to 98.75%--again, the highest ever reported to NIC. That percentage is noteworthy, because it puts seniors housing on the same footing as the long-established office, industrial, retail, and multifamily asset classes.

Problems Remain for Skilled Nursing

The financial indicators also showed that occupancy rates were at a good level for seniors housing and care properties--with the exception of skilled nursing. During the third quarter, the median occupancy rates for independent living (at 92%) and assisted living (at 88.5%) remained stable from the second quarter, when they had reached the highest levels that NIC had tracked since the second and third quarters of 2000. The median occupancy rate also held steady in the third quarter of 2005 for CCRCs, at 91%.

But the skilled nursing sector showed a decline--continuing a slow, but perceptible change that has been taking place year after year. The median occupancy rate for free-standing skilled nursing went down from 87% in the second quarter of 2005 to 86% in the third quarter. For skilled nursing within CCRCs, the median occupancy declined from 86.5 to 84%.

A similar pattern can be found within the nation's top markets, although overall occupancies are higher. The NIC Market Area Profiles[TM] (NICMAP), a quarterly service that tracks properties specifically in the 30 largest cities or metro areas, show that the median occupancy rate averages 96% for independent living, 95% for assisted living, and 96% for dementia care. But once again, skilled nursing care is the lowest, averaging 93%.

New Solutions for Low Occupancies