This article is part of your SHN+ subscription
Senior living operators are now picking up the pace with occupancy,approaching – and passing – census levels last seen in 2019.
Signs of the race for occupancy speeding up are apparent, given the broader industry’s 11th consecutive quarter of census growth. Some of the industry’s prominent operating companies have reported consistent occupancy growth in recent months.
That trend extends to Tucson, Arizona-based Watermark Retirement Communities, which has focused on solving staffing issues, expanding lifestyle offerings and resident services, all of which help improve occupancy gradually in the last two years.
“At some point, we’re going to be full, and there’s no reason to believe these numbers are going to slow down,” said Chief Investment Officer Bryan Schachter of the opportunity ahead for operators.
Senior living providers across the industry are reporting strong occupancy growth, citing the industry’s lack of new development as a key factor in reaping move-in success.
But as they add occupancy, operators including Benchmark Senior Living, Sinceri Senior Living, Sonida Senior Living and Vi are also well aware that the floor for community stabilization has changed, and that a new generation of older adults is at the industry’s doorstep. That will necessitate a new approach to winning them over in the sales process.
“As long as the dynamics in the industry remain consistent, there are: limitations on new supply and strength in demand, then the best operators are going to see ongoing improvement,” said Sonida Senior Living CEO Brandon Ribar.
‘We will be full very soon’
In 2024, senior living operators are adding occupancy, sometimes at a quick pace, according to industry data.
According to NIC MAP Vision, average industry occupancy registered at 85.6% in the first quarter of 2024, representing a gain of 7.8 percentage points over the industry’s low-occupancy trough of 77.8% in the second quarter of 2021.
Other industry data also shows signs of positive movement. A May report from senior living marketing consultancy Bild & Co. of over 250 communities in 28 states between January and March of this year showed total occupied units averaged 90%. Of those communities sampled, 8% were completely full, while 63% were at 80% census and above.
The positive signs in occupancy growth pair well with operators attempting, but seeing strong challenges in, widening lost margins over the last four years.
Senior living operators’ occupancy efforts have been bolstered by the tailwind of slow construction starts. At the operational level, senior living providers are getting more creative in sales and marketing strategies, while also deepening the resident experience to appeal to prospective residents of the incoming boomer generation.
For example, Benchmark Senior Living is seeking to create more experiences that boomers will want in the coming years. CEO Tom Grape told SHN the company’s stabilized portfolio was “back over 90%” occupancy in 2024, the product of direct feedback from residents and staff.
“We’re making progress and I think that’s a pretty consistent message,” Grape said. “All of the focus again is on improving the customer and associate experience, which is our primary focus.”
Senior living operators in recent years have prepared for the Boomers’ entrance into the market in all aspects of operations, from reinvesting in community renovations to changing programming to be wellness-oriented.
Based in Waltham, Massachusetts, Benchmark Senior Living operates 64 communities across 8 states and Washington D.C.
Vancouver, Washington-based Sinceri Senior Living achieved strong census growth last year, improving occupancy by 13 percentage points compared with the year prior. As of mid-June, Sinceri CEO Chris Belford reported the company’s occupancy growth was another 6 percentage points higher than it was last year. The company also recently took on a portfolio of seven communities from LCS that has an average occupancy over 89%.
Belford noted that the company has maintained and grown its average resident rate, and that has helped offset costs in 2024.
Sinceri operates 88 communities nationwide in 21 states.
Another operator, Sonida Senior Living, reported average weighted occupancy of 85.9% in the first quarter of this year, continuing 12 consecutive quarters of occupancy growth. This year, Sonida Senior Living (NYSE: SNDA) grew its portfolio to 72 communities, with plans to close on a six-property portfolio in a joint venture in the second quarter, according to the company’s latest capital allocation update.
“I’d say we remain really optimistic, and it’s good to see our peers reporting a positive trajectory,” Ribar told SHN.
Chicago-based luxury CCRC operator Vi is seeing occupancy a little above 90% on average at its 10 luxury continuing care retirement communities (CCRC), with assisted living occupancy surpassing pre-pandemic levels by between 2% and 3%, according to President Gary Smith.
And Watermark Retirement Communities has grown occupancy 15 percentage points since 2022. Today occupancy for the company’s stabilized portfolio of communities is hovering at 92%, with momentum heading into the remainder of the year, according to Schachter.
“We’re seeing a 1.25 [percentage point] monthly increase in occupancy, which is fantastic. If that trend continues, we will be full very soon,” Schachter said.
Adapting operations to maintain momentum
Operators that have found success in recent years have renewed efforts in deepening resident care offerings and adding new lifestyle amenities geared toward the baby boomers, from organic menus to reimagined communities with millions invested in modernization.
With development still largely slow thanks to a variety of factors, some companies are choosing now to look inward and improve operations for a new generation before their next growth spurt.
For example, Ribar told SHN that Sonida will focus on growing occupancy as lead generation remains strong and demographic shifts drive demand. By adding a new chief clinical officer this year, Sonida Chief Revenue Officer Mike Fryar said the company would continue to make resident care improvements.
This comes alongside further marketing of its Magnolia Trails memory care properties, something Fryar called Sonida’s “differentiator” in engaging with families to entice move-ins.
“That’s been a big differentiator for us, and it’s really impacted occupancy,” Fryar said.
Vi is in the midst of a multi-million dollar capital improvement effort to upgrade all of continuing care retirement communities. The company recently announced the completion of a $41 million investment within assisted living and skilled nursing, along with a $92 million independent living investment also into its Naples, Florida community.
“These things are just something we need to do to stay relevant and continue to reinvest in our communities. Where we have opportunities to expand, we will do that as well,” Smith said.
Benchmark in 2022 entered the Washington D.C. market with a community in Alexandria, Virginia that recently opened. That coincided with the company making “foundational” infrastructure changes to new electronic medical records and a new human resources platform.
For Benchmark, Grape said, reinvesting back into new communities was just as important as continuing new development, noting the company’s ongoing capital improvements across 30 communities.
Meanwhile at Sinceri, Belford highlighted this year’s focus on customer service and refocused on making programming and resident offerings “broader and bigger” in 2024.
“Our focus this year has really been about elevating customer service, and that is something we definitely want to capitalize on,” Belford said.
