September 10, 2021, Ben Swett, The SeniorCare Investor - Brookdale Senior Living and Welltower continue to show occupancy gains in their senior living portfolios. For both companies, the peak increase was from May to June, with Welltower’s SHOP portfolio posting a 120-basis point increase, while Brookdale was slightly lower at 100 basis points, based on month-end census numbers. Brookdale ended August at 73.7% while Welltower’s U.S. portfolio ended the month at 75.9%.
While Brookdale has posted six straight months of occupancy increases, the rate of growth has been slowing since its peak increase. From June to July, month-end occupancy grew by 70 basis points, but from July to August the increase was just 40 basis points. In normal times, a 40-basis point increase for a month would be great, but these are not normal times. In addition, the third quarter is historically the strongest quarter for census growth, so to see a slowdown in the growth rate is slightly troubling.
Welltower’s U.S. portfolio, on the other hand, has posted 80-basis point increases in four of the past five months, with the outlier being the 120-basis point increase in June. Nice outlier to have. This may have something to do with the fact that Welltower’s portfolio is comprised of many senior living companies, while Brookdale is just one.
Since the bottom in February, month-end census in Brookdale’s portfolio has increased by 360 basis points, while Welltower’s has increased by 500 basis points. Welltower may have been helped by the requirement for staff to be vaccinated at 80% of its communities. All of this is good news, but the real rejoicing will begin when they top 80%, and then 85%. But we have to get through the Delta variant, and now the Mu variant. And then there is that looming flu season, which may be another non-event this year with everyone getting masked up again, not to mention COVID vaccinations on the rise.