A positive case of COVID-19 can more than triple a senior living operator’s equipment costs to prevent the virus’ spread, estimates Belmont Village Senior Living President Mercedes Kerr. Kerr joined National Investment Center for Seniors Housing & Care Chief Economist Beth Mace Thursday for a NIC-sponsored webinar discussion on the ways COVID-19 is affecting senior living operators.
Kerr’s firm, which operates 37 senior living communities in seven states, estimates that one full isolation kit of personal protective equipment to care for someone who has tested positive costs upwards of $45 a day.
“As soon as you have someone in your community who has tested positive, the requirements are such that your COVID-19-specific costs for caring for that individual increase very quickly,” Kerr said.
Although she noted that some of these increased costs operators have incurred during the pandemic may continue even once the initial crisis subsides, the experience has helped increase everyone’s knowledge and efficiency should another wave occur.
“That’s been one of the silver lining of all of this, I suppose,” Kerr said.
In terms of capital availability as the crisis begins to subside, Kerr believes that, moving forward, the industry will see even more of a “relationship-type of market,” meaning transactions with repeat and experienced operators are the most likely to be funded. She also predicts reduced tolerance for what some have termed “private equity tourists.”
“This is not a time when those who are not well-versed in the space should be attempting to come in, and I don’t believe it’s a time when they will be financed by a lot of capital providers,” she said.
Kerr also advised that, even given the current decrease in occupancy the industry has faced in recent weeks, now is not the time for discounts.
“Given the absolute extraordinary effort that has to go into all of what we’re doing, I don’t anticipate an environment for rate cuts to get more people to move in,” she concluded.