Location, Location, Location 19 th Annual NIC Conference NIC MAP Data & Analysis Service
The Great Occupancy Decline 94% Occupancy Trends Majority Nursing Seniors Housing 93% 92% 91% 92.8% 91.0% 90% 89% 88% 89.4% 88.9% 87% 86% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
The Great Occupancy Decline 95% 94% 93% 92% 91% 90% 89% 88% 87% 86% 85% Occupancy Trends Majority IL Majority AL 93.6% 91.5% 89.2% 88.3% 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
IL Occupancy Declines Become More Widespread 2Q08 to 2Q09 Majority IL - YOY Change in Occupancy by Metro (bps, 2Q08-2Q09) San Jose, CA Sacramento, CA Washington, DC Chicago, IL Atlanta, GA Baltimore, MD Kansas City, MO Phoenix, AZ Minneapolis, MN San Francisco, CA Riverside, CA Miami, FL Boston, MA Detroit, MI Dallas, TX San Diego, CA New York, NY MAP31 Las Vegas, NV Los Angeles, CA Seattle, WA Tampa, FL Orlando, FL Cincinnati, OH Philadelphia, PA St. Louis, MO Houston, TX San Antonio, TX Denver, CO Pittsburgh, PA Cleveland, OH Portland, OR -600-500 -400-300 -200-100 0 Basis Points
AL Markets Less Affected, But Not Immune 2Q08 to 2Q09 Majority AL - Change in Occupancy by Metro (bps, 2Q08-2Q09) -500-400 -300-200 -100 0 100 200 300 400 Basis Points Riverside, CA San Antonio, TX Orlando, FL Seattle, WA Denver, CO Phoenix, AZ New York, NY Houston, TX Portland, OR Dallas, TX Washington, DC Pittsburgh, PA Tampa, FL San Diego, CA San Francisco, CA MAP31 St. Louis, MO Miami, FL Boston, MA Minneapolis, MN Los Angeles, CA Atlanta, GA Cincinnati, OH Sacramento, CA Baltimore, MD Philadelphia, PA San Jose, CA Las Vegas, NV Cleveland, OH Kansas City, MO Chicago, IL Detroit, MI
Is it Supply or Demand? 25000 2 Year Rolling and Cumulative Supply vs. Demand - Majority IL 20000 19,266 Units 15000 Units Added to Supply (rolling cumulative) 10000 Units Absorpbed (rolling cumulative) 5000 3,264 0 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Is it Supply or Demand? 4000 3000 2 Year Rolling and Cumulative Supply vs. Demand - Majority AL 2,885 2000 Units 1000 0-1000 -2000 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Units Added to Supply (rolling cumulative) Units Absorpbed (rolling cumulative) -3000-3,449-4000 -5000
Is it Supply or Demand? 0-2000 2 Year Rolling and Cumulative Supply vs. Demand - Majority Nursing 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09-4000 Units/Beds -6000-8000 -10000-12000 -6,786 6786 Units Added to Supply (rolling cumulative) Units Absorpbed (rolling cumulative) -14000-16000 -15,728-18000
Is IL Occupancy Related to Housing? 200 S&P/Case-Shiller National Home Price Index (SA) Majority IL Occupancy 94.0% 180 93.0% 160 92.0% ome Price Index H 140 120 100 91.0% 90.0% 89.0% 80 88.0% 60 87.0% 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 ; S&P Case Shiller Index
Jobs and AL Demand 1,000 Nonfarm Payroll Change Majority AL Occupancy 92.0% Change in Nu mber Employed, in Thousands 500 0-500 -1,000-1,500-2,000 91.0% 90.0% 89.0% 88.0% 87.0% -2,500 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 86.0% ; U.S. Bureau of Labor Statistics
Are Rents Inelastic in Seniors Housing? 50 Change in Occupancy vs. Change in Rent Growth - Majority IL YOY Occupancy Change (bps) YOY Rent Growth 6.0% 0 5.0% YOY Y Change (bps) -50-100 -150 4.0% 3.0% 2.0% YO OY % Growth -200 1.0% -250 0.0% 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Are Rents Inelastic in Seniors Housing? 100 Change in Occupancy vs. Change in Rent Growth - Majority AL YOY Occupancy Change (bps) YOY Rent Growth 8.0% YO OY Change (bps) 50 0-50 -100-150 7.0% 6.0% 5.0% 4.0% 30% 3.0% 2.0% 1.0% YOY % Growth -200 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 0.0%
What Does the Future Hold? 4.5% 4.0% 3.5% 3.0% Seniors Housing Construction - Top 31 MSAs Units Started In Quarter Construction vs. Inventory 4.1% 3.9% 3.9% 3.8% 3.6% 3.6% 3.6% 3.3% 3.2% 2.5% 4,258 4,192 2.2% 20% 2.0% 1.5% 1.0% 0.5% 3,193 2,896 2,455 2,191 1,773 615 352 238 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09
Top 100 Metro Markets Tracked by NIC MAP Akron, OH New Orleans, LA Colorado Springs, CO Fort Myers, FL Tampa, FL Madison, WI Boise, ID Portland, OR San Diego, CA Kansas City, MO Albany, NY New York, NY Columbia, SC Fresno, CA Toledo, OH McAllen, TX Boston, MA Poughkeepsie, NY San Francisco, CA Knoxville, TN Albuquerque, NM Ogden, UT Columbus, OH Grand Rapids, MI Tucson, AZ Melbourne, FL Bridgeport, CT Providence, RI San Jose, CA Lakeland, FL Allentown, PA Oklahoma City, OK Dallas, TX Greensboro, NC Tulsa, OK Memphis, TN Buffalo, NY Raleigh, NC Sarasota, FL Lancaster, PA Atlanta, GA Omaha, NE Dayton, OH Greenville, SC Virginia Beach, VA Miami, FL Charleston, SC Richmond, VA Scranton, PA Las Vegas, NV Augusta, GA Orlando, FL Daytona Beach, FL Harrisburg, PA Washington, DC Milwaukee, WI Austin, TX Minneapolis, MN Bakersfield, CA Modesto, CA Baltimore, MD Nashville, TN Baton Rouge, LA New Haven, CT Birmingham, AL Charlotte, NC Oxnard, CA Chattanooga, TN Philadelphia, PA Chicago, IL Phoenix, AZ Cincinnati, OH Pittsburgh, PA Cleveland, OH Portland, ME Riverside-San Bernardino, CA Denver, CO Rochester, NY Des Moines, IA Sacramento, CA Detroit, MI Salt Lake City, UT El Paso, TX San Antonio, TX Seattle, WA Hartford, CT Springfield, MA Houston, TX St. Louis, MO Indianapolis, IN Stockton, CA Jackson, MS Syracuse, NY Jacksonville, FL Little Rock, AR Wichita, KS Los Angeles, CA Worcester, MA Louisville, KY Youngstown, OH