With more seniors being able to afford retirement, the demand for independent-living units remains healthy this year, according to the latest seniors housing report from Calabasas, Calif.–based Marcus & Millichap Real Estate Investment Services.
Occupancy rates for such units are up to 90.2 percent, a rise of 70 basis points over the year, and are healthy enough to support rent increases of 2.4 percent. The improvement has been consistent, the report notes, as occupancy is up 160 basis points from its 88 percent low in the fourth quarter of 2010.
As a result, development of independent-living units is ramping up, with 1,700 units having entered the market and builders having broken ground on 49 projects, totaling 5,600 units, so far this year.
For assisted-living units, construction is also high, and occupancy will rise to 90.4 percent by the end of this year, Marcus & Millichap note. The sector will see average rents increase by 2.6 percent this year, to $3,278 a month. About 4,500 assisted-living units have been added to the inventory across the country over the past year, with 7,200 units under construction. The additional inventory highlights the highest level in more than a decade.