Seniors housing grows, but nursing home industry lags other sectors in occupancy

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The seniors housing and care industry showed signs of stability and growth in the third quarter of 2005, according to the National Investment Center for the Seniors Housing & Care Industry. But broken down by segment, the nursing home sector showed less robust growth compared to other senior housing, in terms of occupancy.

Loan volume for the third quarter rose to more than $1.2 billion. That represents a 75% increase from the second quarter of 2005 and a 54% rise over the third quarter of 2004. Loan performance also expanded during the third quarter to 98.75% — the highest that NIC has ever tracked. It is a sign that the industry has recovered from its financially challenging period in the lat 1990s.

Another indicator of growth — median occupancy rates — was steady for continuing care retirement communities, assisted living and independent living. But the median occupancy rate for freestanding skilled nursing went 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 difference in the marketable product of a nursing home compared to other senior housing may be to blame.

"From a global standpoint, there's no question that the dispersion or disparity of marketable product in skilled nursing is greater than in the other three sectors," said Tony Mullen, NIC director of research.