Senior living posted a positive total income return of 0.71 percent in the third quarter, led by independent and assisted living, according to the National Investment Center for Seniors’ Housing and Care.

Senior living slightly lagged the NCREIF Extended Property Index, or Extended NPI, which posted a total return of 0.83%, according to a blog post by NIC Principal Caroline Clapp.

“Overall, market fundamentals are positive and have shown little volatility, posting consistent gains over the past three years,” Clapp wrote.

On a year-to-date basis, senior housing has returned 1.53%, beating the extended NPI by nearly 190 basis points. For expanded NPI, the third quarter was the first quarter with positive total revenue in nearly two years.

Both independent living (1.14%) and assisted living (0.33%) posted positive total returns in the quarter. Year-to-date, independent living is back 2.8%, while assisted living is back 0.43%.

Over the long term, independent living outperformed assisted living on a total return basis over the one-, three-, and five-year periods. Clapp noted that this outperformance may be driven by higher margins typically generated in lower-demand environments such as independent living, which require less staff, which means lower labor costs.

The return on living income in the third quarter (1.15%) was in line with the residential sector (1.11%) and the headline NPI expanded (1.2%). Senior housing appreciation – or the change in value of senior housing properties minus capital expenditure – yield (-0.44%) trailed the residential sector (which has now reversed) and the broad general NPI (-0.37%).

The senior housing performance measures were based on the return on 217 senior housing properties valued at $11.5 billion in the third quarter, according to Clapp.

Employment continues to grow

Third-quarter senior housing market fundamentals showed continued increases in occupancy rates across NIC’s 31 core markets for the 13th consecutive quarter as demand continued to outpace supply, according to NIC MAP data provided by NIC MAP Vision. As a result, senior employment was 86.5% for the third quarter – up 0.7 percentage points from previous quarter.

Independent living increased by 0.5 percentage points in the third quarter, while assisted living occupancy increased by 0.9 percentage points, narrowing the gap between the two settings.