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Special Report

Skilled Nursing National Report

2H 2022

Performance is Trending up, but Labor Force
Challenges are a Residual Roadblock

Occupancy makes up nearly one-third of the ground lost. The recovery timeline for skilled nursing facilities likely extends beyond 2023, given the magnitude of losses during the pandemic. However, an inflection point has been reached, and occupancy is steadily climbing. According to NIC Map® Data Service, net absorption from April through June 2022 was positive for a fifth straight quarter, totaling more than 30,000 beds over that span. By comparison, about 105,000 beds were relinquished across the prior four quarters. Despite this positive momentum, the recovery is being constrained by a lingering uncertainty among prospective residents, with the health crisis still posing a potential threat. Labor shortages are also making it difficult for some operators to replenish full occupancy, lacking the necessary staff to provide care. Nevertheless, there are reasons for optimism in the longer-term outlook, as the aging baby boomer generation will facilitate historic demand. Investors able to withstand near-term obstacles could find potential upside. 

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