NIC MAP Data and Analysis Service
In this Issue of NIC MAP Insights
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The Impact of Concessions on Seniors Housing Rental Revenue There is little doubt the recent economic recession has impacted occupancy within seniors housing properties. There have been many anecdotal reports of increased use of concessions in order to attract potential residents. Naturally, the demand for information on concessions has coincided with the increase in this practice. For the last several quarters, NIC MAP has realized this demand and began collecting detailed information regarding concessions and has quantified results from collection during the 4th quarter. During the data collection, there were five primary types of concessions being made:
 As the table above shows, the average concession within independent living was $2,289 and $2,750 for assisted living during the 4th quarter. This concession amount represents the total concession to rental revenue a property will make, taking into account any percentage discount off the regular monthly rent, free rent or any other factor reported. For example, a property offering a 10% discount on monthly rent that is normally $1,000 per month for the first two years, would be making a $2,400 total concession amount. The average total concession amount within independent living represents approximately 93% of a single month’s rent, while for assisted living the average total concession amount represents approximately 75% of a single month’s rent. When taking into account the typical length of stay for a resident, the total concession amount off potential rental revenue is 2.8% within independent living and 2.5% for assisted living. The collection of properties offering concessions are exhibiting lower occupancy rates than the aggregate of properties NIC MAP tracks. In 4Q09, the collective occupancy for these properties was 86.2%, approximately 230 basis points lower than the all occupancy of 88.5% for seniors housing properties within the MAP100. This indicates these properties are underperforming in terms of occupancy and likely using concessions to drive new move-ins. It is important to note these are generally not properties that have recently opened; the average age for these properties is 26 years. |
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NIC MAP Announces Release of Market Signals Beginning this quarter, NIC MAP started publishing a series of insights, NIC MAP Market Signals, based on analyses of current quarter NIC MAP data. These insights will be released periodically and will be posted in the Subscriber Resources portion of the NIC MAP website. As a NIC MAP subscriber, you will have access to these insights before they are released to the general public. Login throughout the quarter to check for newly released information. To view the market signals released this quarter, please click below:
NIC MAP 1Q10 Data Release & Subscriber Webcast Scheduled for April 29 As a reminder, please join us for our 1Q10 NIC MAP Subscriber Webcast, hosted by Robert Kramer, president, NIC, and presented by our lead panelist Michael Hargrave, vice president - NIC MAP®, NIC. This live webcast will provide an overview of seniors housing fundamentals, trends and insights for 1Q10 and will feature a panel discussion with guest panelists Tony Mullen, senior fellow, NIC; Alan C. Plush, MAI, senior partner, HealthTrust, LLC and Patricia G. Will, founder and CEO, Belmont Village Senior Living. The call is scheduled for Thursday, April 29, 2010 at 11:00 a.m. EDT. To register for this event, please CLICK HERE. Please note that only current NIC MAP Subscribers can participate. |
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To learn more about the NIC MAP® Data and Analysis Service, please visit www.nicmap.org, or call (410)267-0504.
