Occupancy at senior living communities potentially could fall by half in the next year if move-ins come to a halt as a result of the coronavirus pandemic, according to BMO Capital Markets.
Although infection fears certainly are scaring away some potential new residents and families, isolation among residents arguably has been a larger strain on occupancy than the virus itself, Jefferies analyst Jonathan Petersen told Bloomberg.
“It’s difficult for families when senior members are cut off from the rest of the world,” he said.
Many senior living stocks have taken a hit over the past month as investors brace for pandemic-caused disruption. The sector also has been grappling with excess supply as operators prep for a coming age wage. Ventas stock has slumped 61% since the start of 2020, whereas Welltower and Healthpeak Properties have each fallen by more than 40%.
Longer term, analysts expect that more diversified business models in the senior living space will help companies weather the storm. Healthpeak, for example, derives less than half its revenue from senior housing, whereas Ventas and Welltower rely more on the business.