Usually, a few weeks does not translate into a long-term trend, but for Welltower’s SHOP portfolio, it may just be the case. And it is one we have all been waiting for since it is the largest portfolio in the senior living sector to make some forecasts from.
After plummeting by approximately 1,200 basis points since February 2020, average occupancy has seemed to have bottomed out in March 2021 at 73.7%. The monthly declines in occupancy in the first quarter were already slowing, with March being the best of the pandemic era with just a 10-basis point drop. But for the weeks ended March 12 and March 19, it rested at 73.7%, before rising 20 basis points the next week and 10 the week after that, bringing the average to 74.0% for the last week of March.
Recognizing that anything could happen to result in a drop in the next several weeks, we will take the positive news. It is no coincidence that the number of trailing seven-day positive COVID cases in Welltower’s communities has plunged from a high of 1,227 in mid-January to just 10 by the end of March. As a result, leads and move-ins are on the rise again. Indexed against February’s levels, move-ins are at their second highest level of the past 12 months. That will most likely increase again in April.
With construction starts near their lowest levels in nine years, the threat of new competition, for both residents and staff, is at its lowest. Since the entire industry is in fill-up mode right now, that is great news. The problem is that discounting will still be prevalent, and everyone in the industry will be eying the upcoming demographic boom. Consequently, this window to rebuild census may not be open for as long as we all want. Time to invest in your sales staff.
