Assisted living fundamentals continue to show improvement

The recovery in assisted living is keeping pace as occupancy continues to improve. In 3Q11, assisted living occupancy was 88.6 percent, which is an increase of 10 basis points from the prior quarter and 110 basis points above the cyclical low established in 1Q10.

Absorption rose at a similar pace to the previous quarter, with the number of occupied units increasing by 0.5 percent in 3Q11. While absorption was markedly positive, the pace of inventory growth was 0.4 percent—nearly on par with absorption, resulting in the relatively small occupancy gain.

The pace of year-over-year rent growth continued to remain positive at 1.1 percent, which is the same pace as the prior quarter. As of 3Q11, the average monthly rent for assisted living properties within the top 31 metropolitan markets was $3,555.

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