Brookdale Senior Living just released its occupancy update for February, and our first take was that things need to be better than that. Then, we remembered our late 2020 analysis which showed that assisted living occupancy has never increased in the first quarter for each of the past 10 years. Therefore, we should not expect too much this quarter.
In this light, Brookdale’s census outlook is not too bad. From January to February, the weighted average occupancy dropped just 10 basis points to 73.3%. Even better, the month-end occupancy increased by 20 basis points from the end of January to 74.4%. The problem is that census at the end of September was 74.2%, so we have seen little overall movement in five months.
However, the company achieved positive net move-ins and move-outs in February for the first time since 2014. That will hopefully translate into some momentum as we head into warmer weather. It is quite possible that Brookdale could eke out a small first quarter census increase, but will need positive numbers in March to do that. That would certainly buck the historical trend for the industry.
The bigger problem that remains for Brookdale is that in one year, while gaining 400 basis points of occupancy from the low of 69.4%, it is still at a very low census, and at least 10 percentage points from where it most likely wants to be. Finding those 5,000 or more residents will be tough, especially if they can’t find the labor to staff for the increase. The bottom that Brookdale hit a year ago was about the lowest we saw of the major companies, and that is a very difficult hole to work out of, especially when you are that large. Not losing occupancy for the full first quarter would be a great step in the right direction.
