Brookdale Senior Living just announced its August occupancy results, and it continues to roll
on with the increases, but not quite rockin’. The third quarter for the industry has always, and we
mean always, been the one quarter with decent occupancy gains year after year, so if Brookdale
did not post gains for the first two months, we would be concerned.
The provider posted its seventh straight month of an increase in month-ending occupancy.
August ended at 77.9%, up 80 basis points from the end of July, which itself was 50 basis points
higher than the end of June. This is not too shabby, but the absolute levels are still way too low
for a solid financial recovery.
Month-end occupancy year over year was up 420 basis points. They will need that sort of year-
over-year increase through 2024 to get back to any sort of profitable level. That may not be easy
with the necessary rate increases to deal with labor, food and energy inflation perhaps pricing
some customers out of the market. How the new pricing levels will impact future occupancy
gains for the entire industry is unknown, but it can’t be good.
Since the end of 2021, Brookdale’s month-end occupancy has increased by 340 basis points
(eight months), 290 basis points since the end of March (five months) and 130 basis points since
the end of June (two months). Brookdale is certainly moving in the right direction, but needs
some sharper increases, which will be tough given the size of the company. And looking to the
future, from September 2021 to April 2022, the company had minimal net occupancy gains,
hovering around 73.5% in this period. We will see how this year’s fourth quarter goes, but
historically the fourth quarter has been a mixed bag for occupancy.
In their favor was the high level of August move-ins, surpassing 2,200, the highest number in the
past four years. The cynic in us has to be reminded that the past four years were the worst four
years for the industry as a whole. But we try to be positive….
