Perhaps when Brookdale Senior Living can better focus on a smaller number of properties when its lease for 120 communities with Ventas ends at the end of next year, they will be able to push occupancy on the remaining portfolio. The company’s size will shrink by nearly 20% if the full lease termination goes through as disclosed last week, and we have to imagine that the Ventas properties require a lot of management time.
Meanwhile, the company reported November’s occupancy, and while there was some good news, census levels still disappointed us at this point in the recovery from the pandemic. Investors, however, differed from our assessment, sending the share price up by 7.5% before ending the day up just 1.5%.
Weighted average occupancy in November was a post-pandemic high of 79.5%, which was up 10 basis points from October and up 110 basis points from November 2023. The direction is right, but still, it could be better. Should be better.
Month-end occupancy, however, was down 40 basis points from October, resting at 80.4%. Sure, it represented the fourth straight month above 80%, but it also represented the same census level as the end of August, the first month it edged above 80%. Our guess is that now the decision has been made to not renew the Ventas lease, management will start to focus more on the other communities, but they still need to cover those lease payments through next year.
