Continuing care retirement communities are adapting to a changing market of healthier seniors, which includes reducing skilled nursing units, a new report finds.

CCRCs — also referred to as “life plan communities” — have a bright future, according to a report from commercial real estate firm CBRE Group. Such facilities now have higher occupancy rates than other senior care segments, with rent growth outpacing other types of senior housing over the past few years. Plus, the supply is low, driving higher demand, which will only snowball as the population continues to gray.

But CCRCs struggle with keeping up skilled nursing occupancy levels, the report says, attributing reasons to healthier seniors, shorter time spent due to declining Medicare/Medicaid reimbursements and more care in non-SNF settings. Some CCRCs are converting their SNF units into rehab facilities and creating more private rooms, the report finds. Such adaptability bodes well for the communities’ future, experts said.

“The current strong market conditions — relatively high occupancy, rent growth outperforming other seniors housing sectors and somewhat limited new supply — position CCRC/LPCs for solid performance in the near term,” the authors note. “The baby boom demographic wave should have an enormous and very positive impact on the market by creating considerable new demand for CCRC/LPC product.”

Two unique characteristics of life plan communities make them particularly attractive to boomers, including their focus on “lifestyle enhancement,” allowing individuals to age in the same place, with ascending levels of care in one location. Plus, they attract what CBRE calls “planners,” who have a long-term outlook on their living needs, and a strong desire to map out their future.

Currently, there are about 1,153 CCRCs in the U.S., according to the National Investment Center for Seniors Housing & Care, representing about 20% of the group’s total senior housing and care unit database, according to the report.