Investment banking firm Ziegler just came out with its quarterly analysis of the CCRC (LPC) market, using the NIC MAP census data. For the 99 NIC primary and secondary markets, CCRC average census increased by 50 basis points to 86.0% from the first to the second quarter. This is about 690 basis points higher than non-CCRCs. The analysis covers 1,097 not-for-profit and for-profit CCRCs, both entrance-fee and rental in the 99 markets. We do not know about the other 900+ CCRCs in the country.
Occupancy growth since the bottom of the pandemic has been slower in CCRCs than the rest of seniors housing mostly because census did not fall as much during the pandemic, with a relatively healthier resident base in CCRCs. For example, census growth in the independent living, assisted living and memory care markets that are not part of CCRCs was two to three times higher than for those segments within CCRCs.
Then, when comparing the not-for-profit CCRCs with the for-profits, the NPFs outperformed, with a second quarter average occupancy of 87.3% compared with 82.3% for the for-profits. In every region of the country except the Pacific region, NFPs outperformed the FPs. The for-profits in the Pacific region had the highest census of all, 90.0% compared with 84.8% for the NFPs in that region.
Across unit types, CCRCs also outperformed non-CCRCs on the census front. Independent living occupancy in CCRCs was 770 basis points higher (89.1% vs. 81.4%) than in non-CCRCs, 550 basis points higher in assisted living (84.8% vs. 79.3%), and 510 basis points higher in memory care (84.0% vs. 78.9%). The closest results were in the nursing segment, with CCRCs outperforming non-CCRCs by just 220 basis points (80.5% vs. 78.3%). It should be noted that CCRCs, both for-profit and not-for-profit, have been slowly getting out of the skilled nursing business in their communities.
The first issue that needs to be addressed is why do not-for-profits outperform the for-profits? The easy answer is that because many of them do not pay taxes, they have more money to put into operations, and in today’s market, that means labor. Although we have not seen any recent studies, not-for-profits historically paid a higher wage than the for-profits, and not only does this help with retaining staff, but the mission of a not-for-profit can sometimes be more pronounced than with a for-profit.
As readers are aware (or should be by this point in time), we have advocated for higher wages across the board in seniors housing. It is not the be all and end all, but it will certainly help. We can also learn about why the culture at some not-for-profits seems to be better than at some for-profits. As the industry continues to emerge from the depths of the pandemic, it may be a good idea to learn what we can from the not-for-profits to improve census and operations.
