Chartwell Retirement Residences, the largest operator of seniors housing in Canada, serving more than 25,000 residents in four provinces, posted a net loss in the second quarter, but same-community occupancy increased by 180 basis points year over year to 79.2%. The operating margin at the facility level increased by 120 basis points year over year to 32.7%. The loss in the quarter was mostly due to higher finance costs, higher G&A expense and negative changes in fair values of financial instruments, so not the operations.
It is interesting that of the large REITs with major operations in Canada, Ventas has the best occupancy rate at 94.3% in the second quarter, up 90 basis points year over year. Welltower’s providers have a range of occupancy rates from 86% down to 74% in the second quarter, based on regions. But most are on an upward trend for occupancy.
Historically, Chartwell has followed a familiar path, with census dropping from December to April every year. In the five-month period ended April 2022, it declined by 130 basis points, and then started to grow back. In the next year, from December 2022 to April 2023, census dropped by only 40 basis points, ending at 78.7% in April. Since April 2023, occupancy has surged by 170 basis points to 80.4% in July, and management has projected that it will increase by another 60 basis points in August and 70 basis points in September. Why? Leasing activity in 2023 to date is 15% higher than pre-pandemic levels. How about that.
