This week, Ziegler and the National Investment Center (NIC) released an occupancy report for Life Plan Communities (LPC) for Q2 of 2023. The analyses offer a year-to-year comparison of changes in occupancy, inventory, and residential fees for both LPC and non-LPC communities in the NIC Primary and Secondary Markets; total, 1,165 LPCs in 140 markets are represented in this dataset.

• LPCs continued to outperform non-LPCs in overall occupancy, with LPC independent living (IL) occupancy being the strongest (90.0%,) followed by LPC AL (86.9%) and LPC memory care (86.4%) occupancy, respectively.
• Entrance fee and rental LPCs combined had higher occupancy rates in IL; entrance fee LPCs continue to outperform rental LPCs in this area. While LPCs demand more in residential fees (called “Asking Rent” by this dataset) overall, non-LPCs saw the largest rate-increases this quarter and year, compared to LPCs. Non-LPCs saw the greatest increases in “Asking Rent” in their assisted living (AL) and memory care segments, year over year.
• Although not as high a percentage increase as non-LPCs (5.9%), LPCs also saw the greatest year over year increases in fees in AL and memory care (collectively, 5.0%.) The average differential in what LPCs charge in monthly fees for AL and memory care is about $500 per month over non-LPCs.
• As compared to last year, both LPCs and non-LPCs saw an inventory decline in skilled nursing facilities (SNF) beds, -1.9% and -0.9%, respectively. A companion NIC report, also released this week, on SNF occupancy—which improved slightly this month—attributed some of this inventory decline to an inability to provide care due to ongoing staffing shortages.

The Ziegler report concluded with a brief discussion on the reaction and resistance of current and prospective LPC residents to rate increases; essentially, increased residential fees, even in high-end communities with affluent residents, reach a threshold of sustainability, and providers must be sensitive to that fact.