Occupancy rates are down 10 basis points this quarter in the senior housing sector, compared to the last quarter of 2015. The drop may be partly due to inventory growth, which would justify recent oversupply concerns.
New construction has also slowed, indicating the industry may simply be finding equilibrium. The slow in starts might be due to financing difficulties. With so many factors at work, “We’ll have to wait another few quarters to see the impact,” says Beth Burnham Mace, chief economist for NIC.
Shareholders of Senior Housing Properties Trust (NYSE: SNH) anticipate strong earnings in the upcoming year. Senior’s housing annual rent growth is also up 0.3 percentage points, the highest since 2008. This growth, according to NIC chief of research and analytics, Chuck Harry, “reflects the market’s current relatively balanced supply and demand trends, as absorption has largely kept pace with strong inventory growth during the past couple of years.”
Source: Senior Housing News. Senior Housing Occupancy Drops as Inventory Grows at Fast Pace.
