Skilled Nursing National Report

Absorption stays firmly positive entering this year. Skilled nursing has faced some of the most difficult challenges across commercial real estate since the onset of the pandemic, but the sector is showing clear-cut signs of an ongoing recovery. According to NIC Map® Data Service, the fourth quarter of 2022 marked the seventh straight period of positive absorption, with about 39,000 beds becoming newly occupied throughout those 21 months. However, this came after the relinquishment of almost 110,000 beds spanning the previous seven-quarter span, reflecting the considerable ground that still needs to be made up. The deficit to match pre-pandemic occupancy is nevertheless shrinking, as the total supply of beds is on a downward trajectory. Since 2017, nationwide inventory has fallen in practically every quarter, with the number of beds dropping nearly 4 percent over the past five years. The removal of excess stock is helpful in the near term to restore occupancy, and may present favorable conditions longer term amid an aging population set to fuel demand for nursing care services.