The National Investment Center (NIC) recently released new data for 2023 continuing care retirement community (CCRC) occupancy trends in Quarter 1 (Q1), and specifically compared these trends for entrance fee versus rental fee properties.

• First, the review found that overall, entrance fee CCRCs were successfully gaining occupancy, above and beyond rental CCRCs and non-CCRCs, as has been true since NIC started tracking and comparing these models in 2005. In Q1, entrance fee CCRCs had an occupancy rate of 89.3%, as compared to rental CCRCs (84.4%) and non-CCRCs (81.6%.) This gap in occupancy between the models, which has been increasing since 2015, has only increased more during and post-pandemic.
• NIC found that the profiles of both residents and staff of entrance fee CCRCs contributed to their occupancy success; entrance-fee residents tend to be ‘life planners’ who consciously choose the Type A model with considerable resources set aside for the related fees, and staffing challenges are often solved by re-distributing leaders through the levels of care during vacancies. Residents of entrance fee CCRCs are often also carefully screened for financial reserves, and this leads to greater retention of residents, along with the overall greater financial stability and solvency of entrance fee CCRCs that leads to greater consumer confidence.
• Regionally, the strongest occupancy rates overall were in the Mid-Atlantic, Northeast and Pacific regions for all model types; the Mid-Atlantic and Southwest regions were the closest to full recovery to pre-pandemic levels for entrance fee CCRCs. Interestingly, the Southwest region has fully recovered to pre-pandemic levels for rental CCRCs in that area. Monthly fees across all care segments remained higher for entrance fee CCRCs as compared to rental CCRCs; nursing care unit inventory continued to have the largest declines for both entrance fee and rental CCRCs. The greatest recovery in inventory for entrance fee CCRCs was in IL apartments, and for rental CCRCs, in memory care units.

The data review concluded with the need for both entrance fee and rental CCRCs, as well as non-CCRCs, to overcome the lingering effects of the pandemic by adapting to the rapidly changing market conditions and by addressing rising operational costs. Any community with an occupancy above 80%, as were the majority of CCRCs and non-CCRCs evaluated in this data set, are likely the best positioned to achieve financial sustainability through improved occupancy and evolve with the changing market conditions.