When it comes to assisted living rent growth, senior living providers in some markets are lagging behind.

In fact, there are 11 major metro areas where assisted living rent growth and occupancy is behind the curve, according to a new report from the National Investment Center for Seniors Housing & Care (NIC). The report, authored by NIC Senior Principal Lana Peck, examined same-store annual asking rent growth for 31 primary markets between the third quarter of 2015 and the third quarter of 2019.

The 11 markets — Detroit, Orlando, Miami, San Antonio, Dallas, Chicago, Kansas City, St. Louis, Atlanta, Philadelphia and Denver — all saw assisted living rent growth less than the national average of 3% during the four-year period, according to the report. Detroit saw the lowest amount of growth, with 1.7% rent growth in that time, while Denver was the highest of the bunch at 2.7% rent growth.

 

In the 31 primary markets that NIC tracks, average annual asking rent growth was 2.3% in the third quarter of 2019, and 2.5% in 4Q19. That figure peaked at 3.8% during the fourth quarter of 2016.

Occupancy in those markets was also lower than average, ranging from 74.6% in San Antonio on the low end to 86.2% in St. Louis on the high end.

 

There isn’t one clear reason as to why assisted living rent growth lagged behind the rest of the country in those markets, Peck noted. Instead, it might be multiple factors driving the trend.

“A simple answer may not be enough as there may be a variety of influences, including, but not limited to, demand fluctuations, several consecutive quarters of sustained construction, price pressures from new seniors housing inventory competition or oversupply, lost market share to alternative options for housing and/or care such as age-restricted multifamily apartments, home health services, co-housing, aging-in-place technology, and adverse local economic conditions,” Peck wrote.

There were also five markets with higher than average rent growth but lower than average occupancy. Those ranged from 3.3% rent growth in Phoenix and Cincinnati, to 3.0% in Houston. Occupancy ranged from 86.1% in Cincinnati to 77.9% in Las Vegas. This seems to lend further credence to the notion that a variety of factors informed rent growth and not just occupancy.

The markets with highest average assisted living rent growth rates and highest average occupancy rates for the past four years were San Jose, Portland, Sacramento, New York City, Los Angeles, San Francisco, Baltimore, Seattle and San Diego. Unsurprisingly, these are markets with limited new senior housing supply due to barriers to entry that include significant land development regulations, geographical constraints on expansion, long entitlement processes and premium prices on land for development.