We are starting to get glimpses of seniors housing occupancy growth in the fourth quarter of 2021, and the only good news so far is that there at least haven’t been losses in average census. First, NIC announced that seniors housing occupancy rose to 81.0% in Q4, a 100-basis point increase from Q3’s average and 230 basis points higher than the pandemic low from Q2. Not great, considering the low basis the sector is coming from.
Then, Welltower came out with its business update and its US SHOP portfolio gained 80 basis points in occupancy in Q4, but there was no gain in December. From its pandemic low in February 2021, Welltower has been able to improve US SHOP occupancy by 670 basis points, an impressive achievement. And move-ins in December were still up compared with December 2019 move-ins, and move-outs were still lower. Brookdale Senior Living also only announced a 10-basis point increase in occupancy in December.
The unforeseen rise of the Delta and Omicron variants surely attributed to the slowdown, in addition to normal seasonalities. And variants’ impact on seniors housing occupancy may not be even fully known yet. But keep in mind the sector has never recorded an occupancy gain in the first half of the year, according to our analysis of more than 10 years of NICMAP assisted living data. That trend in turn puts much more pressure on the sector to grow census in the third and fourth quarters, if we are to return to pre-COVID occupancy levels, which were not terribly strong to begin with. Of course, we are talking about national averages, but we hope some of these trends are factored into the forecasted financials for acquisitions and developments right now. The recovery will not be a straight line.
