Brookdale Senior Living just reported that its May weighted average occupancy increased by 70 basis points from April, to 74.6%. Even better, month-end occupancy in May increased by 90 basis points in May compared with the end of April, hitting 76.2% at the end of May. That’s 460 basis points higher than the end of May in 2021. And, they had more than 2,000 move-ins in May.
This is all counter to the usual performance in the second quarter for the industry, so all is good. Except (always an except), Brookdale’s overall census is still quite low at 76.2%, and needs a lot more of these 90-basis point increases. The third quarter is historically the strongest of the year for seniors housing companies, so if they can produce a few 100-basis point increases in June, July, August and September, they will finally get over the 80% census hump and maybe start to produce some real positive cash flow.
Welltower reported that its U.S. seniors housing portfolio posted a 70-basis point increase in census in May, while Canada turned in an 80-basis point increase. Sounds like we have some consistent gains across the sector. In addition, Welltower is expecting its SHOP portfolio’s agency labor expense to continue to decline in each quarter of the year. Combined with census increases, this should really power some cash flow increases.
Ventas also posted similar numbers for its same-community SHOP portfolio. Preliminarily, May average occupancy was 83.8%, up 90 basis points compared with the first quarter of 2022 for U.S. communities, and up 70 basis points overall (including non-U.S. communities). This absolute level of occupancy (83.8%) is where Brookdale Senior Living needs to get to by early next year. But everyone appears to be making some needed progress.
