There has a great deal written about the deaths in skilled nursing with headlines like “40% of COVID Deaths Occurred in Skilled Nursing Facilities”. One might assume that senior housing is suffering terribly. But remember that people are in skilled nursing facilities because they are very sick; people live in senior living communities because it is their home. Yes, they are old, but they are often in great health, and if they were really in need of medical help, they would have gone to the hospital and then to skilled nursing. So here is a summary of what we see as of mid-July 2020:
- Census in seniors housing is down from 88% to 85%, and it may decline further in 2020.
- Rent rate increases are likely to slow from 2.7% per year.
- Move-ins are just starting to grow after shutdowns.
- The industry needs to refocus selling efforts, and this is just getting started.
- New construction starts were trending down and will continue to decline.
- Government payments have helped cover short term costs and are changing the landscape of services that will be offered incrementally in seniors housing.
- Sophisticated long-term investors continue to buy at 6% and lower CAP Rates.
And from a July 15, 2020 report from NIC.ORG, we see that 5% of residents have tested positive for Covid-19 in 46% of the communities that have at least one case. That means 54% of the communities are COVID-free, and if they have COVID, then 5% of the residents have tested positive.
We will update this information every few weeks, so please check back!