Brookdale Senior Living issued an occupancy update, and the results were positive, but a little muted. The good news is that the company saw occupancy grow 50 basis points from July to August after an 80-basis point increase from June to July. Brookdale does expect another sequential monthly occupancy gain in September 2021, but likely a more moderated rate. The company attributed this to potential residents and their families becoming more cautious or temporarily delaying their decision to move into seniors housing communities in certain areas, as a result of the Delta variant. That shouldn’t surprise many. As of September 22, 2021, approximately 97% of Brookdale’s communities were open to visitors, new resident move-ins and prospective residents. At the end of July, that figure was 100%.
In the update, Brookdale went on to say that it expected to see higher labor costs, not only for higher wages (to remain competitive) but also to increase its recruiting efforts for open positions. The use of contract labor and overtime have increased in the meantime, which certainly does not help margins. Despite these difficulties, the company affirmed that Q3:21 consolidated adjusted EBITDA should remain close with Q2’s level, and stayed within its internal forecasts as of the last earnings call on August 6. Consistency can be good under these circumstances, especially for such a large, national company, but the flu season and winter are approaching. We hope Brookdale can find the labor (and prospective residents) to fill as many units as possible before then.
