Historically, the third quarter is always the best quarter for census growth, and it has generally been a good quarter for most senior living providers. But September has seen a bit of a slowdown, which does not bode well for the fourth quarter. The summer jump in COVID cases may have something to do with it, but also adapting to an influx of new residents may not be easy with the labor shortages nationally.
Capital Senior Living just announced that its September average occupancy increased by 20 basis points from the August average, reaching 81.4%. That is also a 610-basis point increase from the pandemic low of 75.3% in February. But it is a much smaller increase than the 80-basis point increase in August, and the fantastic 130-basis point jump in July. The current trend is not their friend, but with COVID cases rapidly declining in most parts of the country, they may go against the grain and turn in a good fourth quarter.
Brookdale Senior Living performed a little better, posting a 50-basis point increase in average occupancy for September, but its overall occupancy level is much lower at 73.0%, which is just 360 basis points above the company’s pandemic low of 69.4% in March. Month-end occupancy also increased by 50 basis points in September. If they can continue to put together a string of 50-basis point monthly increases, they would be breaking through 80% this time next year. But that will not be easy.
Most companies are reporting solid numbers for leads, tours and overall sales activities, but we are now in the fourth quarter, which historically has been a mixed bag for census growth over the past 10 years. Half the time, census has increased, the other half decreased. The real test for the pandemic recovery will come in the first quarter next year, when census has always declined because of the flu season and weather issues. With masks, boosters and flu shots, the flu season could be a repeat of last year, meaning little impact. But everyone wants to relax, especially for the holidays, so you never know.
