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Special Report

Skilled Nursing National Report

1H 2024

Shrinking Supply Continues to Support Current
Inventory Performance, Driving Investment Sales

Net absorption remains firmly positive moving into 2024. The final quarter of last year marked the 11th consecutive three-month stretch in which more beds at skilled nursing facilities were rented than relinquished. According to NIC Map Data Service, this positive net absorption helped occupancy increase by 300 basis points year-over-year to 82.9 percent. Upward momentum is likely to continue, helping hold rent growth above historic norms following last year’s record increase. Supporting this dynamic is less competition among existing properties. Over the past decade, the number of beds has contracted by nearly 38,000 nationally as some operators close or consolidate. During this span, the Great Plains area noted the largest drop in local supply, of roughly 13 percent. Limited beds here bolstered local occupancy to stand as the most recovered among U.S. regions entering 2024. Also, fewer rooms are being completed, with less than 1,500 beds underway nationally to start 2024, the smallest pipeline on record. As it relates to existing inventory, the Mountain and Southwest regions’ construction slates are the most limited.

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