Seniors Housing Overview & Overview & Insights
Seniors Housing Overview & Overview & Insights g Crittenden Multifamily Conference March, 2010 ©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
Seniors Housing
NURSING CARE ASSISTED LIVING INDEPENDENT LIVING SENIOR APARTMENTS
ACTIVE ADULT
HOUSING
SERVICES
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
SENIORS HOUSING
2
Industry Size Seniors Housing Size Estimates; Source: NIC MAP
Number of Units
Number of Properties
Majority Independent Living
812,500
3,840
Majority Assisted Living Majority Assisted Living
475 500 475,500
6 315 6,315
Majority Nursing Care
1,491,000
10,975
Total
2,779,000
21,130
Number of Units 670,000 503,000 105,000 1,501,000 2,779,000
Number of Properties Offering Service 5,175 9,070 4,065 12,525 X
Independent Living Assisted Living Memory Care Nursing Care Total
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
3
Recent Trends 5,000
93.0%
4,000
92.0%
3,000
91.0%
2,000 90.0% 1,000 89.0% 0
Occupancy
Units ‐ Absorp ption & Inventtory Growth
Occupancy, Absorption and Inventory Growth Trends; Source NIC
88.0%
‐1,000 Supply
Demand
Occupancy
2,000 000 ‐2
87.0%
‐3,000
86.0% 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
4
Seniors Housing Rents Are Growing YOY Asking Rent Growth; Sources: MBA, PPR and NIC 7%
3%
‐1% 1% Seniors Housing
Office
Multifamily
‐5%
‐9% 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 ©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
5
Housing is a Driver of IL Demand IL Occupancy and Residential House Price Trends; Sources: S&P Case Shiller and NIC MAP IL Occupancy
200
94.0%
190
93.0%
180
92.0%
170
91.0%
160
90.0%
150
89.0%
140
88.0%
130 120
87.0%
110
86 0% 86.0%
100
85.0% 4Q 2005
1Q
2Q
3Q
2006
4Q
1Q
2Q
3Q
2007
4Q
1Q
2Q
3Q
2008
4Q
1Q
2Q
3Q
4Q
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
66
All O Occupancy
S&P/ Case Shiller Index V Values
S&P/Case‐Shiller National Home Price Index
Employment is a Driver of AL Demand AL Occupancy and Change in Employment; Sources: Bureau of Labor Statistics, NIC MAP; MAP 31 Q/Q Change in Total Nonfarm Employment (1000s)
AL Occupancy
1,000
91.5% 91.0%
500
90.5% 90.0% 89.5%
‐500
89.0%
1 000 ‐1,000
88.5%
Occcupancy
Emp ployment
0
88.0% ‐1,500
87.5% 87.0%
‐2 2,000 000
86.5%
‐2,500
86.0% 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
77
Operating Margins Similar For IL and AL Operating Margins by Community Type: Source: 2010 State of Seniors Housing
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
8
Compared to CRE YOY Change in Occupancy and Rent Growth; Sources: MBA, PPR and NIC 4%
Annual Occupancy Change (Percentage Point)
2%
Annual Rent Growth (Percent Change) 0%
-2%
-4%
-6%
-8%
-10% Retail*
Office*
Multi-Family*
Hotels
Majority IL
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
Majority AL
9
IL Trades Higher than MF Capitalization Rates and Risk Premium; Sources: MBA, PPR and NIC 10.0
Risk Premium (IL over MF; Right Scale)
Multifamily
Indepdendent Living
300
Capitalization Rate (%)
250 9.0 85 8.5
200
8.0 150 7.5 7.0
100
6.5 50
Risk Premiium (basis p points)
9.5
6.0 5.5
0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
10
Returns NPI, Apartment and Seniors Housing Total Returns; Source NCREIF
Total NPI
Total Apartment
Total Stabilized Senior Housing*
3Q09
‐3.3
‐3.0
0.0
2Q09
‐5.2
‐5.1
0.2
One Year
‐22.1
‐23.0
‐6.7
Three Years
‐1.3
‐3.5
7.4
Five Years
6.2
4.6
14.4
Six Years Six Years
72 7.2
56 5.6
14 4 14.4
*Based on 66 properties in the NCREIF database
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
11
Seniors Housing
NURSING CARE ASSISTED LIVING INDEPENDENT LIVING SENIOR APARTMENTS
ACTIVE ADULT
HOUSING
SERVICES
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
SENIORS HOUSING
2
Industry Size Seniors Housing Size Estimates; Source: NIC MAP
Number of Units
Number of Properties
Majority Independent Living
812,500
3,840
Majority Assisted Living Majority Assisted Living
475 500 475,500
6 315 6,315
Majority Nursing Care
1,491,000
10,975
Total
2,779,000
21,130
Number of Units 670,000 503,000 105,000 1,501,000 2,779,000
Number of Properties Offering Service 5,175 9,070 4,065 12,525 X
Independent Living Assisted Living Memory Care Nursing Care Total
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
3
Recent Trends 5,000
93.0%
4,000
92.0%
3,000
91.0%
2,000 90.0% 1,000 89.0% 0
Occupancy
Units ‐ Absorp ption & Inventtory Growth
Occupancy, Absorption and Inventory Growth Trends; Source NIC
88.0%
‐1,000 Supply
Demand
Occupancy
2,000 000 ‐2
87.0%
‐3,000
86.0% 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
4
Seniors Housing Rents Are Growing YOY Asking Rent Growth; Sources: MBA, PPR and NIC 7%
3%
‐1% 1% Seniors Housing
Office
Multifamily
‐5%
‐9% 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 ©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
5
Housing is a Driver of IL Demand IL Occupancy and Residential House Price Trends; Sources: S&P Case Shiller and NIC MAP IL Occupancy
200
94.0%
190
93.0%
180
92.0%
170
91.0%
160
90.0%
150
89.0%
140
88.0%
130 120
87.0%
110
86 0% 86.0%
100
85.0% 4Q 2005
1Q
2Q
3Q
2006
4Q
1Q
2Q
3Q
2007
4Q
1Q
2Q
3Q
2008
4Q
1Q
2Q
3Q
4Q
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
66
All O Occupancy
S&P/ Case Shiller Index V Values
S&P/Case‐Shiller National Home Price Index
Employment is a Driver of AL Demand AL Occupancy and Change in Employment; Sources: Bureau of Labor Statistics, NIC MAP; MAP 31 Q/Q Change in Total Nonfarm Employment (1000s)
AL Occupancy
1,000
91.5% 91.0%
500
90.5% 90.0% 89.5%
‐500
89.0%
1 000 ‐1,000
88.5%
Occcupancy
Emp ployment
0
88.0% ‐1,500
87.5% 87.0%
‐2 2,000 000
86.5%
‐2,500
86.0% 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
77
Operating Margins Similar For IL and AL Operating Margins by Community Type: Source: 2010 State of Seniors Housing
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
8
Compared to CRE YOY Change in Occupancy and Rent Growth; Sources: MBA, PPR and NIC 4%
Annual Occupancy Change (Percentage Point)
2%
Annual Rent Growth (Percent Change) 0%
-2%
-4%
-6%
-8%
-10% Retail*
Office*
Multi-Family*
Hotels
Majority IL
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
Majority AL
9
IL Trades Higher than MF Capitalization Rates and Risk Premium; Sources: MBA, PPR and NIC 10.0
Risk Premium (IL over MF; Right Scale)
Multifamily
Indepdendent Living
300
Capitalization Rate (%)
250 9.0 85 8.5
200
8.0 150 7.5 7.0
100
6.5 50
Risk Premiium (basis p points)
9.5
6.0 5.5
0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005
2006
2007
2008
2009
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
10
Returns NPI, Apartment and Seniors Housing Total Returns; Source NCREIF
Total NPI
Total Apartment
Total Stabilized Senior Housing*
3Q09
‐3.3
‐3.0
0.0
2Q09
‐5.2
‐5.1
0.2
One Year
‐22.1
‐23.0
‐6.7
Three Years
‐1.3
‐3.5
7.4
Five Years
6.2
4.6
14.4
Six Years Six Years
72 7.2
56 5.6
14 4 14.4
*Based on 66 properties in the NCREIF database
©National Investment Center for the Seniors Housing & Care Industry | www.nicmap.org
11
