Investors are selling senior care stocks, and perhaps because occupancy is in a rut with increasing construction starts.
So, what are we to make of the dismal start of the New Year? Investors have hammered away at senior care stocks, and it has been ugly. On Monday, Brookdale Senior Living, Capital Senior Living, Genesis Healthcare and Kindred Healthcare all hit new lows. Who would have thought? Is it a sector problem with investors, or are they nervous about the near-term future? Last week NIC MAP released its fourth quarter occupancy numbers, and while some analysts saw the positive side of a slight sequential increase in overall seniors housing occupancy, the reality is that it is still below the fourth quarter of 2014. Well, it is assisted living that is really lagging from a year ago, and that is where all the new development is concentrated. And assisted living’s occupancy for stabilized properties was basically flat from the third quarter to the fourth. Worst of all for future occupancy, trailing 12-month starts as a percent of supply for assisted living is at 5.9%, a significant increase from a year ago. So those of you who still don’t think supply is going to be a problem, the numbers say something else. Except for independent living, which still seems to be on cruise control.