Brookdale Senior Living recorded its best first-quarter sequential occupancy results in 10 years and in March experienced its highest March move-in figure in history, executives said Friday during a first-quarter 2022 earnings call.
President and CEO Lucinda “Cindy” Baier called it “truly remarkable” that the company achieved first-quarter occupancy amid resident rate increases and inflationary and labor pressures.
The CEO said that Brookdale’s pursuit of having every available room in service at the most profitable rate is becoming a reality as the provider delivered its best first-quarter sequential occupancy results in 10 years. Senior housing average occupancy for April was 73.9%, up from 73.6% in March.
Leads are robust, she added, with first-quarter inquiries exceeding pre-pandemic levels.
“We continue to refine our programs to build a strong pipeline to attract residents wherever they are in their decision-making journey,” Baier said. “We strongly believe in the long-term opportunities for senior housing.”
Executive Vice President and Chief Financial Officer Steve Swain said the company’s first-quarter growth is based on a 5% net rate increase and an almost 400 basis point (4%) occupancy increase through March. Nearly flat occupancy for the first quarter represented better performance compared with pre-pandemic first-quarter seasonal declines, he said.
Move-in volume accelerated in February, and for the first quarter, the provider exceeded pre-pandemic lead-to-visit and visit-to-move-in conversion amounts. That performance led to more than 2,000 move-ins in March, the company’s highest March move-in figure in history.
Baier said she was pleased with the senior living company’s revenue growth, recovery performance and achievement toward its 2022 strategic priorities.
Calling Brookdale a “learning organization,” the CEO said that the company took what it learned from the first year of the pandemic to drive recovery efforts last year. This year, she said, the company is committed to executing its strategic initiatives and improving performance with urgency.
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“With exceptionally strong growth in the first quarter and tangible progress on our strategic priorities, we expect our momentum to continue to accelerate as the year progresses,” Baier said.
Workforce issues a priority
Attracting, engaging, developing and retaining employees is another strategic priority, Baier said. Brookdale’s net hires almost doubled on a sequential basis in the first quarter as the company expanded its workforce by 2.5%, she said. She attributed the results to intense recruiting efforts, competitive compensation packages and flexible scheduling options.
Baier highlighted the fact that the company has experienced net positive hires every month since November.
Although the omicron variant placed additional pressures on a difficult labor environment, first-quarter contract labor expenses improved slightly as new hires moved through the recruiting process. Baier said she expects contract labor to moderate in the second quarter and more substantially in the second half of the year.
Operating expenses 5% higher
Facility operating expenses were 5% higher sequentially, Swain said, whereas contract labor was slightly lower. Resident rate increases, he said, mitigated those higher costs.
Operating expenses were up 8% sequentially due to higher COVID-19-related expenses — which were $10 million for the first quarter — higher investments in marketing and customer acquisition costs, and seasonally higher utility costs. Senior housing operating portfolio expenses increased 5% total for the quarter.
“There is a significant topline growth opportunity, given the favorable supply-demand tailwinds,” Swain said. “With growth of our target population for the rest of the decade, and the relative decline in new senior housing units under construction, the runway for strong revenue growth is compelling.”
