As many people expected, seniors housing occupancy levels declined in the first quarter this year, with assisted living posting larger declines than independent living. According to the recently released NIC MAP data, primarily assisted living communities in the 31 primary markets posted a sequential drop in occupancy of 50 basis points to 87.2%, and a year-over-year drop of 100 basis points. Even though these numbers were sort of expected, there was some hope that the sector was starting to turn things around in the quarter. Not yet. It was a little surprising that half the year-over-year drop came in one quarter, however. On the independent living side, occupancy in the top 31 markets dropped by a smaller 20 basis points sequentially and 30 basis points year over year. The IL market continues to fare better, and we are hosting a webinar on April 27 on the topic of investing in CCRCs and independent living communities.

Assisted living inventory growth continues, which is the main reason for the occupancy declines, even though we have been prepared for the annual saga of the flu season impact, which always seems to impact some providers more than others. Assisted living inventory growth was 4.9% in the first quarter, which was an increase both sequentially (20 basis points) and year over year (60 basis points). Independent living inventory growth was just 2.3% in the first quarter for the top 31 markets, representing a similar 20 basis point increase sequentially. Construction versus inventory remains high at 8.6% for assisted living, but is showing a bit of a decline as a percentage of the market. Anecdotally, we hear from some providers/developers that they are seeing no slowdown in development, at least where they develop, and they are not slowing down either. The occupancy news had no impact on share prices, as a drop had been expected. And we assume that Brookdale Senior Living, given its size, had a significant impact on the overall NIC numbers. We will find out early next month.