The good occupancy news keeps on coming from the first quarter earnings announcements, with New Senior Investment Group the latest to report an occupancy jump in April. After January occupancy ended down 80 basis points, February down 60 basis points and March down 20 basis points, sequential occupancy grew by 40 basis points in April to 80.6%, which was the company’s first occupancy gain since the pandemic began. There was more good news, with first quarter leads representing 103% of average 2019 volume, and April leads staying above 2019 levels as well.
COVID-19 cases were also down to nearly zero, with one active resident case as of May 3 and four new resident cases reported in the whole month of April. In addition, resident vaccination rates topped 80%, so that should help smooth the census recovery. The company expects occupancy to be up between 120 and 150 basis points in the second quarter.
On SNR’s earnings call, CEO Susan Givens cautioned that there is still a lot of uncertainty around the “pent-up demand” for independent living services. We know the road won’t be easy, but the successful vaccination organizational effort should speak for itself as a marketing effort.
Revenue per occupied unit (RevPOR) rose slightly from $2,713 in Q4:20 to $2,715 in Q1:21 across the same store portfolio (which still includes the 21 assets transitioned to Atria Senior Living on April 1), but the operating margin fell from 39.1% to 36.1% over the same period. That is a 300-basis point decline, and the margin is off 360 basis points from the year-ago quarter, so it really took a hit this winter. Seasonality played a part, but so did higher utilities, higher insurance costs, lower occupancy and increased costs related to filling those empty units.
Total same store cash NOI of $29.5 million represented a 16.0% decrease compared with the first quarter of 2020, while SNR reported a net loss of $7.6 million in Q1:21. Looking forward to the second quarter, across the same-store portfolio (excluding the 21 Atria properties), the company expects to see another 15% drop in cash NOI from approximately $35.23 million in Q2:20. That puts cash NOI at around $29.95 million in Q2:21, which would be a 1.5% sequential increase.
