Seniors Housing Weekly Update - Brookdale Occupancy Declined As Expected

May 12, 2015

May 12, 2015. 60 Seconds with Steve Monroe.

Brookdale Senior Living was no different from the rest of the market, posting sharp drops in first quarter occupancy...

Brookdale Occupancy Declined As Expected

When we wrote the May issue of The SeniorCare Investor, we had to make some assumptions before Brookdale Senior Living announced its first quarter earnings. One assumption was that its occupancy rates had dropped given everything else we had heard in the market. Our assumptions were right. The legacy Emeritus properties posted a 110 basis point decline from the fourth quarter of 2014, and a whopping 200 basis point decline from a year ago. The legacy Brookdale properties dropped 80 basis points sequentially and 110 basis points from a year ago. This was not good news, but not unexpected. Oddly enough, the legacy Brookdale properties had a 250 basis point increase in community operating margin to 35.2% despite the occupancy declines. The Emeritus properties had a 90 basis point sequential drop in margin, which makes more sense. The reasons for the legacy Brookdale improvement were a combination of cost controls and more pricing flexibility. Move-ins have been increasing, which is great, but “cost controls” always makes me nervous, especially with the current acuity creep. Stay tuned.

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