A new report paints a rosy picture for continuing care retirement communities this year, with occupancy staying strong and construction numbers increasing steadily.
According to a new analysis from real estate investment firm Marcus & Millichap, released on Friday, CCRCs (also known as life plan communities) had the highest stabilized occupancy among all types of senior housing, at 91%, in June. And inventory of such facilities has ticked upward steadily over the past six years, at a clip of about 3,000 units, the firm noted.
The average cost to move into CCRCs is high, with monthly expenses at about $3,192 per month, up 3.3% from the previous year, whereas turnover of units has remained low.
“The high costs to move into these facilities deters many residents but also keeps turnover at a minimum as tenants remain in the same community as their care needs change,” the report noted.
Construction of new CCRCs has more than doubled over the past five years, with about 11,400 units in development. M&M expects rent and entrance fees to continue to trend upward, with monthly rent averaging about $3,219. The firm also expects investment activity in these communities to remain strong going forward.
“Investors in search of communities that serve a variety of resident’s needs are targeting CCRC/LPCs this year, and trading volume is on track to outpace activity over the prior two years,” M&M wrote.
