Senior living’s appropriate place in the care continuum and its importance in improving care outcomes have risen more prominently as discussion topics thanks to the COVID-19 pandemic, says Derek Bunker, chief investment officer of the Pennant Group.
“The silver lining to [the pandemic] is that it is forcing operators to become better providers of care,” Bunker told the McKnight’s Business Daily. “We see these changes as a long-term positive trend for the industry and one that will ultimately reward operators that prioritize not just the quality of life amenities but the quality of care provided within the community.”
Bunker said the Eagle, ID-based holding company is excited to do everything it can to facilitate the administration of the COVID-19 vaccine to residents and employees and noted that this administration should help families better understand the importance and safety of the senior living setting. He warned, however, that senior living communities likely will not see a quick change in occupancy.
“In accordance with CDC guidelines, we are planning to continue our infection control protocols for the foreseeable future,” Bunker said. “Providers that take the same approach will likely have slightly elevated wage and supply expenses, somewhat offset by what is expected to be declining supply costs over time.”
When it comes to mergers and acquisitions within the industry in 2021, Bunker said there does appear to be some pent-up volume that may lead to dealmaking over the next several quarters. He noted that throughout the pandemic, the sector has seen the valuation gap widen between stable and underperforming communities and it’s likely that trend will continue.
