Occupancy rates at assisted living facilities remain healthy, despite the sharp economic downturn. According to a comprehensive study just released by a consortium of industry groups, the average occupancy rate among buildings open at least 12 months is 94.1%.
That’s only about 1% lower than when the study was last conducted three years ago. The survey of 500 assisted living facilities occurred during the first three months of 2009.
"Assisted living is a needs-driven business," says Maribeth Bersani, senior vice president of public policy at the Assisted Living Federation of America (ALFA), one of the sponsoring groups of the 68-page survey. "If an older person needs care, she needs care."
Occupancies at dementia care facilities stand at 97%, an indication that housing for those who need a significant amount of care should continue to fare well. The survey backs up what assisted living operators report, says Bersani. "It's very hard to care for someone with dementia at home and
The survey, titled "2009 Overview of Assisted Living," was sponsored by ALFA along with the American Association of Homes and Services for the Aging, the National Center for Assisted Living, the American Seniors Housing Association and the National
Statistics from NIC based on the top 31
Some operators report that occupancies are on the upswing again. At Benchmark Assisted Living, an owner and operator with 44 buildings, occupancies average about 91%, somewhat above last year's level, according to Tom Grape, Benchmark chairman and CEO. He aims for occupancies in the 93% to 94% range. "We have more room to grow, but it's better than it was," says Grape.
According to the survey, the West region has the lowest overall occupancy rate. About one-third of the reporting properties have an occupancy rate of 84.9% or lower. Three-fourths of the facilities in the South Central region reported an occupancy rate of 85% or higher.
Rents are holding up, too. The average rate for a private room in an assisted living facility is $3,000 per month. A dementia care unit averages about $4,500 a month.
At Benchmark, rents this year are up about 4% to 5%. Rents in better times typically increase about 6% to 8% annually, says Grape of Benchmark Assisted Living. "Compared to other real estate assets, assisted living rents have held up well." Benchmark rents average about $4,500 a month.
One trend uncovered in the survey is that the person paying the rent is changing. In 2009, 66% of assisted living residents paid the bill themselves. Three years ago, 52% of residents paid the bill themselves, with 34% paid for by the family. About 6% of residents get support from long-term care insurance, up from 3% three years ago.
The resident profile is changing, too. The average age of a resident this year is 86.9, up from 85.3 three years ago. The average annual turnover rate of residents is 42% compared with 38% three years ago. The average length of stay for a resident is about 28 months.
Few new projects are under way, notes ALFA's Bersani. That should boost property performance, according to Benchmark's Grape. The lack of new
Other operators are expanding. Brightview Senior Living has a new project under way in Billerica, Mass., just north of Boston. The building, Brightview Concord River, features about 90 units of assisted and dementia care.
The project should be open by the end of the year. Brightview, a division of the Baltimore-based Shelter Group, also hopes to start another assisted and independent living project this year in Evesham, N.J. Other plans call for the expansion of the Brightview Bel Air property in Hartford County, Md.
David Carliner, executive vice president at the Shelter Group, believes even brighter days are ahead for this segment of the seniors housing industry. "We expect demand for assisted living to continue to grow."