Continuing Care Retirement Communities
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 3,700 continuing care retirement communities (CCRCs) in the US provide assisted living with on-site skilled nursing facilities, independent living, assisted living, and skilled nursing services either on campus or at nearby facilities. These facilities involve a contract each resident signs, entitling them to a continuum of care in exchange for payment of an entrance fee and ongoing monthly fees.
Sensitivity to Capital Markets
Difficulty in obtaining financing or in re-financing existing debt can force CCRCs to delay needed renovations, postpone planned expansions, or prevent them from breaking ground.
Demographic Trends Grow Demand
Since January 2011, baby boomers have been turning age 65 at a rate of 10,000 per day - and this will continue for 20 years.
Industry size & Structure
The average CCRC has about 128 employees and generates $10.5 million in annual revenue.
- There are about 3,700 CCRC firms in the US operating 5,300 facilities with $40 billion in annual revenue and 446,000 employees.
- About half of facilities are "true" CCRCs offering care from independent living through skilled nursing under a contract that guarantees a continuum of care in exchange for an entrance fee and ongoing monthly fees.
- About half of "true" CCRCs are affiliated with faith-based organizations, such as Presbyterian, Lutheran, Methodist, or Catholic churches.
- Companies that own and operate multiple communities include Life Care Services and Erickson Living.
- CCRCs are located in a range of geographical areas from urban to suburban to rural.
Industry Forecast
Continuing Care Retirement Communities Industry Growth
Recent Developments
Apr 3, 2024 - Moderate Sales Growth Expected
- Continuing care retirement community industry sales are forecast to grow at a 5.5% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry labor costs increased during 2023 as employment increased moderately while average wages for nonsupervisory employees increased slightly, according to the US Bureau of Labor Statistics.
- Occupancy rates at private-pay senior-housing communities are nearing pre-pandemic levels, according to the National Investment Center for Seniors Housing & Care (NIC). The average occupancy rate was 85.1% in the 31 largest US markets in the fourth quarter of 2023, just 2 percentage points below the first quarter of 2020 but up significantly from the pandemic low point of 77.8% in the first half of 2021. Rent increases have outpaced inflation, according to the NIC, with independent living costing an average initial rate of $4,126 a month in December and the more intensive assisted-living units costing $6,422.
- Living in communal senior housing is associated with greater longevity versus residing in the community at large, according to University of Chicago researchers. There is notable variation between top-performing senior housing communities and those on the bottom, however. The researchers examined outcomes for people who moved into a senior living community in 2017 and lived there through 2019 or until death, versus a matched group of peers dwelling outside of senior living communities. Senior housing residents had a mortality rate of 20.1% versus 22.4% for the comparison group. The researchers also found that residents in the top 25% of senior living communities tend to live more than two months longer than residents in the bottom 25% of communities.
- There has been a 4% drop in the number of retirement communities in the US over the past five years, according to the Best States to Retire 2023 report from financial research firm Scholaroo. Texas, California, and Ohio — which have the highest number of retirement communicates — showed an average drop of 2.6% in the number of retirement communities. Florida was the only one of the 10 states with the highest number of retirement communities to show growth, with an increase of 0.72%.
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