After the March to September outsized occupancy gains (but to July for some companies), it does seem that census growth is stalling before the Holiday season and the dreaded first quarter.
Sonida Senior Living, the rebranded name for the former Capital Senior Living, just announced its most recent monthly occupancy statistics, and while “average” occupancy held “steady” in November at 81.2%, one would hope for a bit more growth as we enter the winter months. In addition, it appears to be at the lowest occupancy level since July, a four-month time period where average occupancy has not really moved.
End-of-month occupancy slipped by 60 basis points in November to 81.7%, which is also the lowest month-end since July. Not to pick on Solida, since they have been through a lot well beyond the pandemic in 2021, but we hope they do not get stuck there. However, whether it was pent-up demand or just natural new demand, the March to September census push for the industry seems to be losing its luster. It will return, perhaps in the second quarter, but four straight months of basically static occupancy gains for Sonida, during a quarter (the third) which historically has been the only one with consistent census gains for the industry, is troubling, to say the least.
Perhaps the 590-basis point increase since their pandemic low in February wore out the staff and marketing people. Perhaps it has been tough to find the labor force needed to constantly increase occupancy. Or perhaps it is just going to take longer than expected for everyone to get back to pre-pandemic levels, and hopefully, pre-2018 levels. Perhaps all of the above.
Investors did not like the news, initially sending the share price down by more than 27% on heavier than average trading volume.
