The Canadian seniors housing market has fared a bit better than its U.S. counterpart during the past year or so, but it also started in a better place. Take the Canadian SHOP portfolio of Ventas. It currently has 74 communities that operated in the first quarter 2021 with net operating income of $171.8 million, or just over $2.3 million per community (all amounts in U.S. dollars). This compares with 364 communities with $272.7 million of NOI in the first quarter for the U.S. SHOP portfolio, or $749,000 per community. So, Canada makes up 17% of the communities but 39% of the NOI. Hmmm.
On a same-community basis, there were 68 Canadian communities in the first quarter last year and this year. A year ago, occupancy was 96.3%, which dropped to 92.2% in this year’s first quarter. A decline of 420 basis points over a year is nothing compared to what happened in the U.S. market, with the Ventas U.S. SHOP portfolio losing 1,300 basis points of occupancy over the year, with an average of just 70.2% in the first quarter 2021.
It does help to start a pandemic at a near-full occupancy level, and we have seen U.S. companies and portfolios with high occupancies declining by a similar 500 or 600 basis points, as opposed to more than 1,000 basis points. The problem for Canada is that it may have a slower rebound because they have not had the same access to the vaccines as U.S. communities and the general population. Across the U.S senior living sector occupancy levels have strongly rebounded in March and April.
Chartwell Retirement Residences, based in Canada, did not fare as well as the Ventas Canadian portfolio. Same-community occupancy dropped from 89.3% a year ago to 78.8% in the first quarter of 2021, representing a decline of 1,050 basis points. The vaccine rate in its communities has been high, over 90% of residents, but census has continued to drop this year, not experiencing the March-April rebound that we have seen in the U.S. Occupancy at January 31 was 79.7%, down 110 basis points from the previous month, and the dropped another 100 bps in February, 90 bps in March, 80 bps in April and a forecast of a 40 bps drop in May to 76.6%. At least the trend is their friend, but it is a tale of two universes when compared with Ventas in Canada.
