Development impacts independent living.
New supply in the independent living sector remains at a cyclical peak, weighing on occupancy levels across the nation. Units under construction represent approximately 10 percent of existing inventory, limiting the potential for a rapid turnaround in operations this year. While competing new units are spread throughout the country, the most pronounced supply overhangs are in the Southwest and Southeast, where occupancy is below the market average and new construction represents more than 13 percent of inventory. Although the near-term outlook suggests some structural weakness in operations in these areas, long-term demand should help realign the supply-demand balance. Several markets in the Sunbelt are projected to add a substantial number of seniors over the next decade. Additionally, many retirees that are house rich and cash poor are unlocking that equity and moving into age-restricted apartments and later independent living facilities.