Brookdale Senior Residing (NYSE: BKD) is seeing the outcomes of its “SWAT” crew efforts to enhance occupancy throughout its low-performing properties, in keeping with interim CEO Denise Warren.
As of the second quarter, 129 of Brookdale’s 617 senior dwelling communities reported occupancy beneath 70% and 74 communities reported occupancy within the second quarter between 70% and 75%. A complete of 250 communities vary between 85% and larger than 95% occupancy.
That is an enchancment from the primary quarter, when Brookdale reported 143 communities beneath 70% occupancy.
In Might, Brookdale introduced it was rolling out the “SWAT crew” method to help struggling communities, and Warren mentioned that communities “don’t begin masking our mounted prices” till reaching the 80% occupancy threshold.
“We’ve to get them up and so we have to get these properties shifting,” Warren mentioned.
To that finish, Warren mentioned Brookdale should take a “bifurcated” method to helping its communities, together with these battling census progress.
Weighted common occupancy was 80.1% within the second quarter, a rise of 200 foundation factors in comparison with the identical interval final 12 months. That marks the primary time since 2020 through which Brookdale’s consolidated occupancy was above 80%.
Brookdale will offload a complete of 55 communities within the firm’s leased portfolio and plans to rid itself of a further 28 property. Of 41 communities deliberate on the market, 27 are within the below-70% occupancy band and most will exit the portfolio in 12 to 18 months.
The Brentwood, Tennessee-based senior dwelling supplier raised its income per out there room steering to five.25% and 6%, whereas additionally elevating Earnings Earlier than Curiosity, Taxes, Depreciation, and Amortization (EBITDA) steering to $445 million and $455 million, with the transition of leased communities anticipated to cut back EBITDA in 2025 by $2 million in comparison with prior steering.
Brookdale posted a web lack of $43 million within the second quarter of 2025, which the operator linked to a rise in working and G&A bills, together with a rise in depreciation and amortization bills.
Brookdale inventory fell $0.67 to $7.13, a lower of 8.59% at market shut on Thursday.
SWAT method exhibits early outcomes
Final 12 months, Brookdale rolled out a pilot program of recent incentives and pricing promotions to extend occupancy in sure communities with the purpose of serving to lagging communities regain census.
Of the 129 properties beneath 70% occupancy, 50 communities are set to be launched from the portfolio by means of lease terminations or asset gross sales and 38 communities are working with Brookdale “SWAT groups” to enhance census and income.
Of the remaining 41 properties, 19 communities require “one, two or three” move-ins to advance to the subsequent occupancy threshold as occupancy in communities 95% and above within the second quarter consists of 88 properties, up from 73 within the first quarter, Warren mentioned.
Two SWAT groups at the moment are in place masking 137 communities, with the primary crew targeted on underperforming, “high-opportunity” areas that require “rapid consideration,” Warren mentioned. These properties have reported a 350 foundation level improve in occupancy and seven% improve in income per occupied room (RevPOR) progress for the reason that fourth quarter of final 12 months, in keeping with Brookdale’s monetary presentation.
The second SWAT crew is devoted to working with communities that “collateralize our upcoming debt refinancing,” Warren mentioned, aiming to enhance efficiency to “maximized collateral worth.” These properties noticed a rise of 200 foundation factors for the reason that SWAT effort began within the first quarter, Warren famous.
New to the SWAT effort, Warren introduced on Thursday’s earnings name that Brookdale would even be making a “everlasting distressed asset crew” to share sources with communities in want of further oversight which can be falling behind.
General as a part of the hassle, G&A bills had been diminished by $850,000 within the second quarter in comparison with the primary, down from $1.2 million. Because the fourth quarter, occupancy throughout the 137 communities receiving further SWAT crew help elevated 350 foundation factors with a 7% improve in RevPAR, Brookdale monetary knowledge exhibits.
“We’re conscious additional progress must be made on our price construction, and we’ll proceed to focus our efforts on this space throughout the third quarter,” Warren mentioned.
With the brand new efforts to enhance lagging communities, Brookdale SWAT leaders will help communities rent new workers extra shortly and decide the perfect use of capital expenditures (CapEx) to drive move-ins. In whole, Brookdale invested $49 million in CapEx initiatives within the second quarter with 500 initiatives underway with particular investments made in “first impressions” upgrades to drive move-ins.
“Quite a lot of it’s actually growing the sense of urgency that we have to take,” Warren mentioned.
Newly applied adjustments at communities embrace every day standup conferences between operations, gross sales and advertising departments to enhance accountability and shortly resolve operations-level challenges.
HealthPlus rollout ongoing
Brookdale continues to roll out its HealthPlus care coordination program aimed toward enhancing residents’ high quality of life and decreasing preventable emergency division visits and hospitalizations, the place attainable.
Warren mentioned Brookdale intends to have the rollout of HealthPlus communities to “slightly below” 200 by the top of this 12 months, and the interim chief views this system as a “native market differentiator” to enhance resident care and stand out in opposition to different senior dwelling competitors.
Residents in communities that use the HealthPlus platform have reported 80% fewer pressing care visits and 65% fewer hospitalizations.
“We expect it’s a key differentiator for Brookdale,” Warren mentioned. “It’s one thing that’s differentiating us from a gross sales standpoint.”
Everlasting CEO search continues
After the departure of former CEO Cindy Baier, Brookdale is within the means of figuring out future candidates to fill the nation’s largest senior dwelling supplier’s prime place.
Following the conclusion of the corporate’s annual shareholder assembly and a contentious proxy combat with activist investor Ortelius Advisors final month, Warren mentioned the corporate is shifting forward with its everlasting CEO search. All of Brookdale’s really useful board members had been authorized by shareholders following the July assembly.
“This suggestions is instrumental in how we’ll form Brookdale’s path ahead and we’ll refine how we talk Brookdale’s worth proposition,” Warren mentioned.
Brookdale’s CEO search committee has reviewed roughly 50 potential candidates for its prime submit, casting a large web throughout senior dwelling, well being care, hospitality and actual property sectors seeking a brand new chief, Warren mentioned.
“The committee and full Board have interviewed a variety of candidates, and with the annual assembly now behind us, we purpose to conclude the method within the coming months,” Warren mentioned.
