Unlike Australia, potential new residents are staying at home rather than joining a ‘retirement village’, causing significant operator loan defaults.

The NIC MAP^® Data Service (NIC MAP) reports that Continuum of Care Retirement Communities (CCRCs – similar to our integrated continuum of care villages) have held occupancy up better than the US independent living only villages.

CCRCs in the December 2020 quarter averaged 89.6% occupancy versus 80.9% for the independent living only villages.

Given the American model is rental income based, empty homes directly hits their bottom line (and ability to repay debt).

COVID pushed $765.8 million of municipal bonds issued for senior living communities into default last year, and this year $425.1 million of municipals have already been defaulted on, according to data compiled by Bloomberg – a total of US$1.19 billion.

CCRCs also held up better than independent standalone segments. For instance, within CCRCs their assisted living and memory care units each averaged 84.2% occupancy. Non CCRC stand alone assisted living operators averaged 77.8%, memory care 76.7%, and nursing care 74.9%.

Reports are that the decline in occupancy continues in 2021 despite 29 million people aged 65-plus being vaccinated and there being no limitations on home inspections (like we had in Australia).

The outtake is that the continuum of care model has stood up better as a customer proposition than stand alone independent living, assisted living, memory care or skilled nursing (aged care homes).