Brookdale Senior Living and Genesis HealthCare, the two largest providers, were not spared from COVID’s devastation in the second quarter.
The two largest providers in their respective sectors, Brookdale Senior Living in seniors housing and Genesis HealthCare in skilled nursing, did not escape COVID’s wrath. No one expected they would.
Fortunately for Brookdale, they have negotiated most of their underwater leases, so that will lessen the economic pain. But consolidated occupancy fell 440 basis points from the first quarter to the second. As of July 31, occupancy was at 76.6%, 120 basis points below the June 30 level. And COVID is spreading in two of its largest states, Florida and Texas.
As for Genesis, year-over-year occupancy dropped by 960 basis points, with occupancy based on operating beds at 77% for a second quarter average. Skilled nursing occupancy is lower at 74.8%. Skilled patient days plunged 36.5% in the second quarter from the year-ago quarter. The company also issued a “going concern” statement at the end of the earnings release. Not good. Without the federal assistance it has received, we are not sure where they would be. The problem is that some of it has to be paid back, and that may be a problem.
Unfortunately, the deeper this occupancy hole gets for the industry, the longer the recovery. Too many providers are seeing occupancy below 80% and still trending down. I wish I had better news, but it is what it is.