Diversified Healthcare Trust is feeling the pain that most of the REITs also have been feeling: census is still dropping. Its senior housing operating portfolio (SHOP) posted a 380-basis point decline in census in the fourth quarter. While not good, the progression was worse. It started with a 70-basis point drop in October, growing to 130 basis points in November and then a plunge of 180 basis points in December alone. And this when 93% of its SHOP communities, the vast majority managed by Five Star Senior Living, are open for new admissions. 

What this means is that just because you are open for business, it does not necessarily mean people will move, even if it is safer and better for your well-being than staying at home. Rolling four-weeks sales leads in late January were up 83% since the start of the fourth quarter, but you need people who know how to get them to convert to admissions. This is a problem the entire industry will have to deal with.  

But with that large a drop in December, before all the new strains of the coronavirus really started hitting many states, we expect January and/or February to break through that psychological occupancy line and head into the upper 60% area. And unfortunately, DHC will not be alone. A horrible way to start a new year, and a year after one we all want to forget. 

It was not all bad news for DHC’s SHOP communities. With 18,000 residents and staff, 65% of residents and more than 30% of staff have received vaccinations. Of those, more than 2,000 have received both doses. What is concerning, however, is the 30% of staff number. We keep on hearing about the reluctance of many staff members to get the vaccine.  

We also hear that the major reason is a basic mistrust of the healthcare system and a basically untested vaccine. And these are healthcare workers. Even after seeing their company CEOs and community-level EDs get the vaccine, the mistrust remains. This does not bode well since staffers bringing the virus into the communities, often asymptomatic, have been partially blamed for the spread in congregate living environments. 

This is the month that we will hear about January’s census numbers as the public companies and REITs begin to report their fourth quarter and year-end 2020 results and shed light on the first six weeks of 2021. The decline has to stop sometime, but the news from the CDC has not been exactly encouraging. Stay tuned.