Certain themes emerge when you listen to quarterly senior living company and real estate investment trust earnings calls, and there were 11 such calls last week.
Of course, the big topic on all of them was COVID-19 and its effects on the industry. The speakers shared details of today’s coronavirus-related challenges — lack of personal protective equipment and testing, negative messages about assisted living communities and nursing homes in the lay media, operating and financial difficulties — but they also shared good-news stories of communities rising to meet those challenges as well as their hopes for the future.
And one of the positive effects arising from this pandemic, some said, is a growing appreciation of senior living among people whose parents are the age of prospective residents.
Healthpeak Properties CEO Thomas Herzog said he’s had conversations with all of the Irvine, CA-based REIT’s major operators. (Among them, according to a recent Healthpeak presentation, would be Sunrise Senior Living, Oakmont Senior Living, Atria Senior Living, Brookdale Senior Living, Discovery Senior Living and Senior Lifestyle Corp.)
“We have a number of adult children that are home right now from work that are taking care of the parents,” he told analysts and others on the call on Wednesday. “What we have heard from numerous operators is, it’s much, much harder than they had expected.”
These adult children, Herzog said, are worried about what they will do when they need to return to work, or what would happen if they themselves became ill and were unable to care for their parents, especially if the older adults need assisted living or memory care.
“Oftentimes, these vital needs are ones that the adult children find out that they just literally cannot handle at home,” he said. For that reason, Herzog predicted that when the crisis ends, “there will be pent-up demand that will increase move-ins beyond the average historical levels.”
Healthpeak President and Chief Investment Officer Scott Brinker said senior living operators in the REIT’s portfolio have 200 deposits from people waiting to move in across 16,000 units, a sign of the underlying demand.
“Now that doesn’t mean that there’s not going to be net attrition,” Herzog said, “but in the assisted living / memory care side of the business, there will continue to be lease-up, based on everything that we have heard from multiple operators.”
Rick Matros, chairman and CEO of Irvine, CA-based Sabra Health Care REIT, also shared his assessment of pent-up demand for assisted living and memory care communities, based in part on the increases in leads and virtual tours that Enlivant, an operator in the REIT’s portfolio, began to see in the second half of April.
“The backlog of delayed move-ins makes us cautiously optimistic about occupancy level,” he said Thursday.
New York-based New Senior Investment Group CEO Susan Givens said Friday that she also has heard encouraging news anecdotally.
“A lot of people are calling and saying, ‘I want my parents to be in an environment where I at least know they are getting fed. They don’t have to go to the grocery store, they don’t have to go out and go to Walmart. I want people to be looked after,’ ” she said.
Whether these wishes turn into move-ins remains to be seen, Givens said, adding, however: “We still have people that want to move into the properties. We still have people wanting to tour and move family members in, and the inquiries that we’ve been receiving in the last couple weeks have actually been much higher than what we’ve seen historically. …I think that tells us that there is a real view that the value that this product offers is important.”
CareTrust REIT operators already have had a “surprising” level of new admissions, and occupancy was flat in April, Chief Operating Officer Dave Sedgwick said Friday on the REIT’s earnings call.
“Our seniors housing operators report that prospective residents and their children, after being in quarantine for several weeks and often together, are coming to the realization that they could not get the assistance needed in their homes and they couldn’t afford to wait to move into assisted living,” Sedgwick said.
Among San Clemente, CA-based CareTrust’s biggest senior housing tenants are The Pennant Group, with 11 properties, and Premier Senior Living, with eight properties. Many of the communities target middle-income individuals, executives said.
“Maybe that high-end, private-pay-only prospective resident could afford to wait a little bit longer, but it’s been our experience thus far that many of our prospective residents can’t wait, couldn’t wait, and so went ahead and moved in.”
As we begin another week — one with several more earnings calls — know that at least some people out there understand and appreciate what you do.