Rents Still Increasing in Seniors Housing Industry

By Anuradha Kher, Online News EditorNew York–Rents for nursing homes, in-home care and assisted living kept growing in 2009, according to a new study conducted by Richmond, Va.-based insurer Genworth Financial Inc. The average annual rent for a private room in a nursing home is $74,208, or $208 per day, a 4.7 percent boost over the past year and 4.3 percent annually over the past five years, according to the study. The annual rent ranges from $50,594 in Louisiana to $125,925 in Connecticut. Overall, the Northeast clocks in with the highest rents of the nation for nursing homes.(IL = independent living, al = assisted living, snf = nursing)  The rent for a one-bedroom unit in an assisted living facility is $33,903 annually, or $2,825 monthly, marking an increase of 1.4 percent over 2008 and 4.7 percent annually over the last five years. North Dakota has the lowest annual rent at $25,049, with Massachusetts the highest in the continental U.S., at $55,137.“Right now, rents are falling in the multifamily sector, but that is not the case in the seniors housing industry where rents are increasing,” Michael J. Hargrave, vice president of NIC MAP, tells MHN. NIC MAP is a data and analysis service of the National Investment Center for the Seniors Housing & Care Industry. “One reason is that the cost of running these communities has not gone down during this recession and because demand in assisted living communities and nursing care homes is need-based, it is not as price sensitive.” The fact that need is the predominant driver of demand in this sector makes it a little more recession proof. Hargrave adds that concessions are being provided in some communities but this hasn’t become the norm the way it has in the apartment sector. While Genworth does not cover independent living communities in this survey, according to NIC MAP’s data, rent in this sector of seniors housing has also been increasing. In the fourth quarter of 2008 rent grew 4.7 percent from the previous quarter with the average monthly rent at $2,502.“Independent living communities are less need-based than AL and snf, but definitely have a big need component to them, and rents in that sector are going up as well” adds Hargrave.Source for charts:  NIC MAP Data & Analysis Service