NIC: Financial Indicators Show Strong Recovery in 50+ Housing

Financial indicators from the second quarter of 2005 show that the seniors housing industry has made a strong recovery from a period of falling occupancies and poor loan performance, according to numbers tracked and released by the National Investment Center for the Seniors Housing & Care Industries (NIC).

Every quarter since 1999, the nation’s leading senior living lenders, owners/operators, and appraisal professionals have reported their key financial and performance data to NIC. The information is then posted as the NIC Key Financial Indicators on www.nic.org and accessed free of charge.

“Our second quarter indicators give factual corroboration to what has been both heard and observed in the industry, namely, that seniors housing is very hot right now and trends are all heading in the right direction,” said Robert G. Kramer, NIC president.

Loan volume rose to $692 million dollars during the second quarter of 2005, up from $674 million in the first quarter. The loan volume collected by NIC represents the quarterly lending activity of the top national lenders (non-REITs) that make permanent or short-term debt investments in seniors housing and care.

During the same period, the number of performing loans increased to 98.5%, which is the best loan performance NIC has ever tracked. “This number is very encouraging news and finally puts the seniors housing industry on par with other commercial real estate asset classes,” said Anthony J. Mullen, NIC research director.

Median occupancy rates for independent living and assisted living for the second quarter of 2005 were the highest that NIC has tracked since the second and third quarters of 2000, providing further evidence of the recovery and strong performance of the seniors housing industry. More than 3,200 properties with approximately 373,500 units reported their numbers to NIC.

Year-over-year numbers also showed movement of 100 basis points or more in each product type except for skilled nursing. Compared to the second quarter of 2004, the average capitalization rate for independent living dropped from 9.1% to 8.2% and for assisted living from 10.8% to 9.2%. Skilled nursing went from 13.1% to 12.9% and CCRCs declined from 9.6% to 8.6%.

For complete data, read NIC's press release on the key financial indicators showing strong recovery in 50+ housing. [Return to top]