By: Barbra Murray, Contributing Editor
No part of the commercial real estate industry has been spared by the economic crisis, but the senior living sector has been less brutally impacted than others have. And according to a new report issued jointly by a quintet of industry groups, the assisted living sub-sector is achieving the seemingly impossible these days--high occupancy levels.
The 2009 Overview of Assisted Living Survey was jointly produced by the Assisted Living Federation of America, the American Association of Housing and Services for the Aging, the American Seniors Housing Association, the National Investment Centers for the Seniors Housing and Care Industry, and the National Center for Assisted Living. As per the results, the current occupancy rate for assisted living properties is nearly 95 percent. Survey respondents cited safety and quality as factors behind continued desirability of assisted living communities, but there is much more behind the ongoing demand for these facilities, which cater to the elderly who are neither completely independent, nor completely dependent.
"We're convinced that the census for assisted living is as high as it is--and even higher for dementia care facilities--because it's need driven and there's no big buy-in as with continuing care retirement communities," Chris Black, a consultant to the Assisted Living Federation of America, told CPN. "Most assisted living facilities are rented and they charge a la carte for additional services, so it's reasonable. Rent, meals, everything you need is included, so it's not insanely expensive. And what differentiates assisted living from, say, skilled nursing is that it's consumer focused; 9 out of 10 dollars are private pay." Even in the midst of the severely challenging economic environment, entrée into these properties remains "reasonable" largely due to competition, she noted. "Incentives are a part of the marketing strategy even in good times, but now it's even more important."
While vacancy levels remain relatively low for assisted living facilities, development of these properties has indeed been hit hard by the perfect storm of credit market inaccessibility, housing market collapse, growing unemployment and the overall debilitating grip of the recession. "Expansion is the aspect that's been most affected, but once the economy recovers, we expect a quick turnaround," Black said. "There's a lot of optimism in the field and people are bullish on assisted living because the population is aging and people are living longer." As per the survey, the median age of assisted living residents is presently 86.9 years, up from 85.3 in 2006. "Drugs have allowed the elderly to manage chronic health conditions independently, and to continue to live independently with a limited amount of assistance."
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