60 Seconds with Steve: Brookdale Senior Living and SWAT

Brookdale Senior Living announced it had recently formed SWAT teams to deal with its lowest-occupancy buildings to try to get them over the 80% hump, and there are a lot of them. Since then, the term SWAT team has been appearing more and more with other providers.

SWAT is a scary term, and stands for Special Weapons and Tactics, and in law enforcement is used to deal with barricaded persons, active shooting scenes and high-risk search warrants. Not exactly something we want to be associated with trying to get customers into senior living. But I understand the intent. The other frequently used term is the “silver tsunami” about to hit us. Again, a tsunami is extremely destructive, usually accompanied by a lot of deaths, and not something that should be used with seniors. An age wave is more appropriate. But I digress.

The problem I have with Brookdale’s new SWAT program is that it is way too late. The current Board Chair and interim CEO, Denise Warren, has been an independent director since 2018. Occupancy already had been declining when she joined the Board, and then COVID made it much worse. But where was she (and the other Board members) over the past seven years? Hiding in full view? The new SWAT teams should have been put in place several years ago. Or is this simply a desperate response to the Ortelius Advisors proxy fight? Is that what the independent directors needed to get off their duffs and do something proactive with operations?

I hope this works, but shareholders would have been much better off if this had been started three years ago. The question that should be answered is, what or who was holding them back? Was it the recently terminated CEO, or the Board? Maybe both. What a shame and lost opportunity.