Seniors Housing Weekly Update - Brookdale Posts Better Than Expected Performance

August 13, 2013

August 13, 2013. 60 Seconds with Steve Monroe. By most measures, Brookdale Senior Living turned in a good second quarter, but not good enough to keep its share price up.

Brookdale Posts Better Than Expected Performance

It seems that sequential occupancy declines, but year-over-year increases, have been the common theme for this year’s second quarter earnings results. Brookdale Senior Living was no exception. The company did have some nice highlights, however. Bucking the trend, its more than 400 assisted living communities posted an 80 basis point year-over-year increase in occupancy, plus a 30 basis point sequential increase. What we also liked was that Brookdale had a record 128 entrance-fee closings in its CCRCs in the second quarter, and a 15% increase in net cash flow from these closings compared with a year ago. More than anything, that may be a telling sign as to where consumer sentiment is heading for seniors housing, and that’s a good thing for everyone. Combined with an increase in same community operating margins, management increased earnings guidance for 2013. Investors pushed the stock price up by 5%, but that didn’t last long. Perhaps with the continued decline in REIT prices, the rumored acquisition of Brookdale will remain just that, a rumor.



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