Welltower’s total senior housing operating portfolio occupancy declined approximately 220 basis points during the fourth quarter, falling from 78.4% to 76.2%, according to a business update released Tuesday by the Toledo, OH-based real estate investment trust. Occupancy has declined an additional 85 basis points month-to-date, dropping to 75.3%.
The REIT reported that occupancy remains pressured by a decline in move-in activity resulting from a continued increase in COVID-19 cases and implementation of shelter in place orders across many of the firm’s regions. In addition, as expected, higher than anticipated COVID expenses, particularly those related to labor, personal protective equipment and sanitation have resulted in fourth quarter operating margins in the low-20% range. Welltower said it expects operating margins to deteriorate further in the first quarter of this year, owing to the likelihood of further occupancy losses, elevated COVID-related expenses, and seasonal factors.
On the positive side, the REIT collected 97% of fourth quarter rent from its triple-net portfolio. Further, distribution of COVID-19 vaccines in seniors housing communities across the United States commenced during the week of Dec. 21.
The firm noted that the number of vaccines administered to residents and staff within Welltower-owned communities has accelerated in recent weeks, having tripled during the week of Jan. 15, as compared with the week prior. In addition, some residents and staff are beginning to receive second doses of the vaccine through clinics administered by CVS Health/Omnicare, Walgreens, and other partners.