Housing Fundamentals and Trends in Senior Housing
description
Transcript of Housing Fundamentals and Trends in Senior Housing
Housing Fundamentals and Trends in Seniors Housing Chuck Harry, Managing Director, NIC Mike Hargrave, Chief Market & Data Strategist, NIC
Agenda
National Market Fundamentals Overview of Select Metropolitan Markets Seniors Housing Outlook Capital Market Trends
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National Market Fundamentals
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Seniors Housing Occupancy Flat in 1Q13
85%
86%
87%
88%
89%
90%
91%
92%
93%
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Seniors Housing Supply-Demand; MAP31 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 4
Seniors Housing Occupancy Compares Well
Source: NIC MAP® Data & Analysis Service; MBAA; REIS; STR
-800
-600
-400
-200
0
200
400
600
2007 2008 2009 2010 2011 2012 2013
Annual Change in Occupancy (Basis Points) 1Q07 – 1Q13
Apartment Office Retail Hotels Seniors Housing
5
Seniors Housing & Care Occupancy
Majority IL
Majority AL Majority NC
CCRCs
86%
87%
88%
89%
90%
91%
92%
93%
94%
2006 2007 2008 2009 2010 2011 2012 2013
Occupancy by Property Type 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 6
Occupancy Performance by Campus Type
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-150 -100 -50 0 50 100 150 200 250
Combined IL (89.4%)
Freestanding IL (89.4%)
Combined AL (88.7%)
Freestanding AL (89.6%)
Freestanding MC (85.2%)
Rental CCRCs (88.9%)
EF CCRCs (89.1%)
Basis Points
Occupancy Change (bps) by Campus Type; MAP31 As of 1Q13 Quarterly Change
Annual Change
Source: NIC MAP® Data & Analysis Service
Supply Pressuring Memory Care Occupancy
80%
82%
84%
86%
88%
90%
92%
94%
96%
98%
-300
-200
-100
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Memory Care Supply-Demand; MAP31 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R) Stabilized Occupancy (R)
Source: NIC MAP® Data & Analysis Service 8
Memory Care Construction is Pocketed
0%
5%
10%
15%
20%
25%
30%
0
100
200
300
400
500
600
DA
L H
OU
AT
L C
HI
DE
N
MIN
P
HO
B
OS
TA
M
LA
CLE
R
IV
SE
A P
HI
OR
L SJ
KC
D
ET
NY
BA
L D
C
SA
C
SF
CIN
P
OR
LV
M
IA
STL
S
A P
IT
SD
Uni
ts
Memory Construction by Metro Market As of 1Q13 Units Under Construction (L)
Construction vs. Inventory (R)
Source: NIC MAP® Data & Analysis Service 9
Memory Care Construction Surging
Independent Living
Assisted Living
Memory Care
Nursing Care 0%
1%
2%
3%
4%
5%
6%
7%
8%
2007 2008 2009 2010 2011 2012 2013
Rolling 4-Quarter Construction Starts vs. Inventory; MAP31 4Q06 – 1Q13
Source: NIC MAP® Data & Analysis Service 10
Rent Growth Less Volatile
Source: NIC MAP® Data & Analysis Service; MBAA; REIS; STR
-15%
-10%
-5%
0%
5%
10%
15%
2007 2008 2009 2010 2011 2012 2013
Annual Asking Rent Growth 1Q07 – 1Q13
Apartment Office Retail Hotels Seniors Housing
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More Properties Raising Asking Rents
< 0%
0 - 3%
≥ 3%
0%
10%
20%
30%
40%
50%
60%
2007 2008 2009 2010 2011 2012 2013
Perc
ent o
f Pro
pert
ies
Seniors Housing Annual Rent Growth Distribution; MAP31 4Q06 – 1Q13
Source: NIC MAP® Data & Analysis Service 12
Moderate Rent Growth in Most Markets
Source: NIC MAP® Data & Analysis Service
DAL 2.9%TAM 2.7%DC 2.7%CLE 2.6%PHO 2.5%SF 2.5%DET 2.5%
NY 1.9% BAL 2.5%CHI 1.9% LV 2.4%MIN 1.9% ATL 2.4%SA 1.8% ORL 2.3%STL 1.4% PHI 2.3% POR 3.4%SD 1.4% PIT 2.2% BOS 3.2%RIV 1.4% SJ 2.1% HOU 3.2%MIA 1.3% LA 2.1% SEA 3.2%
KC 0.8% CIN 1.3% SAC 2.0% DEN 3.0%
3.0% - 3.99%0.0% - 0.99% 1.0% - 1.99% 2.0% - 2.99%
Seniors Housing Annual Rent Growth by Metro Market As of 1Q13
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Markets in Various Stages of Recovery
76% 78% 80% 82% 84% 86% 88% 90% 92% 94% 96%
SJ
PIT
B
OS
N
Y M
IN
BA
L P
OR
D
ET
SF
CLE
K
C
DE
N
STL
P
HI
DC
S
EA
OR
L S
AC
M
AP
31
SA
SD
R
IV
TAM
LA
AT
L C
IN
MIA
LV
D
AL
HO
U
PH
O
CH
I
Seniors Housing Occupancy by Metro Market As of 1Q13 Pre-Recession Peak to Trough Range
1Q13
Source: NIC MAP® Data & Analysis Service 14
Overview of Select Metropolitan Markets
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Atlanta Metropolitan Market
Atlanta
MAP31
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Atlanta’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 16
Atlanta Metropolitan Market
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
-200
-100
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Atlanta’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 17
Miami Metropolitan Market
Miami
MAP31
85%
86%
87%
88%
89%
90%
91%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Miami’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 18
Miami Metropolitan Market
85%
86%
87%
88%
89%
90%
91%
92%
-400
-300
-200
-100
0
100
200
300
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Miami’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 19
Orlando Metropolitan Market
Orlando MAP31
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Orlando’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 20
Orlando Metropolitan Market
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
-200
-100
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Orlando’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 21
Dallas Metropolitan Market
Dallas
MAP31
80%
82%
84%
86%
88%
90%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Dallas’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 22
Dallas Metropolitan Market
80%
81%
82%
83%
84%
85%
86%
87%
88%
89%
-200
-100
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Dallas’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 23
Houston Metropolitan Market
Houston
MAP31
84%
85%
86%
87%
88%
89%
90%
91%
92%
93%
2006 2007 2008 2009 2010 2011 2012 2013
Houston’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 24
Houston Metropolitan Market
82%
84%
86%
88%
90%
92%
94%
-200
-100
0
100
200
300
400
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Houston’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 25
Chicago Metropolitan Market
Chicago
MAP31
82%
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Chicago’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 26
Chicago Metropolitan Market
82%
83%
84%
85%
86%
87%
88%
89%
90%
91%
-200
-100
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Chicago’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 27
Kansas City Metropolitan Market
Kansas City
MAP31
82%
83%
84%
85%
86%
87%
88%
89%
90%
91%
92%
2006 2007 2008 2009 2010 2011 2012 2013
Kansas City’s Seniors Housing Occupancy 4Q05 – 1Q13
Source: NIC MAP® Data & Analysis Service 28
Kansas City Metropolitan Market
80%
82%
84%
86%
88%
90%
92%
-200
-100
0
100
200
300
400
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Kansas City’s Seniors Housing Supply-Demand 1Q06 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 29
Charlotte Metropolitan Market
Charlotte
MAP31
85%
86%
87%
88%
89%
90%
91%
92%
2008 2009 2010 2011 2012 2013
Charlotte’s Seniors Housing Occupancy 1Q08 – 1Q13
Source: NIC MAP® Data & Analysis Service 30
Charlotte Metropolitan Market
85%
86%
87%
88%
89%
90%
91%
92%
-100
-50
0
50
100
150
200
250
2009 2010 2011 2012 2013
Uni
ts
Charlotte’s Seniors Housing Supply-Demand 2Q08 – 1Q13
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service 31
Outlook for Seniors Housing Market Fundamentals
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Tempered Independent Living Construction
0%
1%
2%
3%
4%
5%
6%
7%
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Majority Independent Living Construction Activity 1Q06 - 1Q13
Construction Started in Prior Quarters (L) Units Started Construction (L) Construction vs. Inventory (R)
Source: NIC MAP® Data & Analysis Service 33
New Property Lease-up Improving
Quarterly
Rolling 4-Quarter
40%
45%
50%
55%
60%
65%
70%
75%
2007 2008 2009 2010 2011 2012 2013
Independent Living Occupancy; MAP31 Properties Less than 2 Years Old 1Q07 – 1Q13
Source: NIC MAP® Data & Analysis Service 34
Assisted Living Construction Surpasses Prior Peak
Source: NIC MAP® Data & Analysis Service
0%
1%
2%
3%
4%
0
2,000
4,000
6,000
8,000
2006 2007 2008 2009 2010 2011 2012 2013
Uni
ts
Majority Assisted Living Construction Activity 1Q06 - 1Q13 Construction Started in Prior Quarters (L)
Units Started Construction (L) Construction vs. Inventory (R)
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Searching for Lease-up Traction
Quarterly Rolling 4-Quarter
40%
45%
50%
55%
60%
65%
70%
75%
2007 2008 2009 2010 2011 2012 2013
Assisted Living Occupancy; MAP31 Properties Less than 2 Years Old 1Q07 – 1Q13
Source: NIC MAP® Data & Analysis Service 36
Searching for Lease-up Traction
Quarterly Rolling 4-Quarter
40%
45%
50%
55%
60%
65%
70%
75%
2007 2008 2009 2010 2011 2012 2013
Memory Care Occupancy; MAP31 Properties Less than 2 Years Old 1Q07 – 1Q13
Source: NIC MAP® Data & Analysis Service 37
Seniors Housing Occupancy Flat in 1Q13
85%
86%
87%
88%
89%
90%
91%
92%
93%
-2,000
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
Uni
ts
Seniors Housing Supply-Demand Forecast; MAP31 1Q06 – 1Q14’F
Inventory Growth (L) Absorption (L) Occupancy (R)
Source: NIC MAP® Data & Analysis Service
Forecast
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Capital Market Trends
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Transactions Volume Nearly $5B in 1Q13
$0
$5
$10
$15
$20
$25
$30
2008 2009 2010 2011 2012 2013
Seniors Housing & Care Transactions Volume (in Billions) 1Q08 – 1Q13
Rolling 4-Quarter Quarterly
Source: NIC MAP® Data & Analysis Service 40
Overall Pricing Rises 22% in 1Q13
All Transactions Portfolio
Non-Portfolio
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2008 2009 2010 2011 2012 2013
Seniors Housing Rolling 4-Quarter Price Per Unit By Transaction Type | 1Q08 – 1Q13
Source: NIC MAP® Data & Analysis Service 41
Seniors Housing Cap Rates Flattening
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2008 2009 2010 2011 2012 2013
Cap Rates by Property Type January 2008 – February 2013
Seniors Housing (Rolling 12-months) Apartments (Rolling 3-months) Office (Rolling 3-months) 10-Year Treasury
Source: NIC MAP® Data & Analysis Service 42
Institutional Interest in Seniors Housing High
Source: 2013 Plan Sponsor Survey; Kingsley Associates; Institutional Real Estate, Inc. 1 2 3 4 5
Hotel
Infrastructure
Office
Retail
Multifamily
Industrial / R&D
Medical Office
+ Seniors Housing
2013 2012 2011 2010
Relative Attractiveness of Property Types for New Investments by Year 2010 – 2013 (Ratings: 1 = least attractive, 5 = most attractive)
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Questions? Chuck Harry, Managing Director, NIC [email protected]
Mike Hargrave, Chief Market & Data Strategist, NIC [email protected]
www.nic.org | www.nicmap.org | 410-267-0504
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