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Within the final week or so, a number of senior residing operators have shared how they’re deploying groups to quickly reply to operational points on the bottom. Some are calling it the “SWAT group” strategy.
I first heard the time period on Brookdale Senior Dwelling’s (NYSE: BKD) most up-to-date earnings name, the place it was used to explain how the nation’s largest senior residing operator is popping round communities with occupancy below 80%. Days later, Sonida Senior Dwelling famous it was deploying “operational excellence groups” at communities throughout the nation with related objectives in thoughts. CEO Brandon Ribar advised SHN that the strategy is much like a “SWAT group” that manages transitions into the corporate’s portfolio.
Then, on Monday, I caught up with new Watermark CEO Paul Boethel, who advised me his present large focus is stabilizing the corporate’s 40-community portfolio with new investments, with a objective to carry common occupancy as much as 94%.
“As soon as we lastly get to what we predict is the true supply of the problem, we then apply incremental assets in opposition to that subject,” Boethel mentioned. “That may be a little bit of a SWAT group strategy, however it’s a focused SWAT group strategy and it may not simply be one group.”
The truth that leaders from three well-known operators see the SWAT group analogy at play is important to me. It suits into an total theme of operators needing to quickly discover their footing now as senior residing demand stays scorching. I feel it additionally exemplifies the strategies by which operators are enhancing occupancy on the bottom after years of challenges.
It additionally speaks to the urgency at which operators imagine they should enhance outcomes. After all, Brookdale and Sonida are barely extra distinctive in that they really feel stress from buyers as public corporations. However they’re not the one corporations that might examine their present operational strategy to calling within the SWAT group.
On this members-only SHN+ Replace, I analyze latest earnings calls and conversations with leaders and provide the next takeaways:
- Why senior residing operators are calling in “SWAT groups”
- How Brookdale, Sonida and Watermark are turning round neighborhood outcomes with a granular strategy
- The forces pushing operators to deploy speedy operational response groups
Contained in the SWAT group strategy
Within the first quarter of 2025, demand for senior residing was at an all-time excessive as new building remained close to lows not seen since 2013. For the primary time since earlier than the pandemic, 4 main metro areas tracked by NIC MAP surpassed 90% occupancy.
That has not essentially translated into across-the-board occupancy will increase for corporations like Brookdale. Slightly below half of the corporate’s 619-community portfolio carried occupancy charges averaging 80% or decrease, in response to its most up-to-date monetary disclosure. Of these 293 communities, 143 have occupancy at 70% or much less.
The Brentwood, Tennessee-based operator is deploying its “SWAT groups” to communities that particularly have a possibility to develop, and it’s utilizing techniques together with eradicating “limitations” to injecting CapEx {dollars}, filling sure roles left vacant or introducing new pricing strategies and incentives to extend communities’ competitiveness amongst prospects.
That strategy has garnered higher leads to 65 communities, and the corporate is rolling it out to different communities in its portfolio, “in order that we will additional speed up our occupancy enchancment,” mentioned Brookdale Govt Vice President and Basic Counsel Chad White.
Firm leaders imagine Brookdale can enhance working outcomes at dozens of communities with out having to extend staffing spend. Brookdale administration famous 31 communities with occupancy under 70% as “high-opportunity” for enchancment. In one other 84 properties, the operator solely must fill between one and three extra models to exceed the 70% occupancy threshold.
Sonida, which has a smaller portfolio than Brookdale with 94 communities, is deploying an analogous technique with its “speedy response group” numbering eight staffers who’ve regional or native operations expertise.
The group aids in possession transitions for newly managed properties and different communities in want of enhancements. Twenty-five of the corporate’s communities – 9 of which had been latest acquisitions – had occupancy under 80% within the first quarter of 2025.
Sonida additionally has separated out 5 communities into a particular repositioning portfolio, with plans to shift them away from Medicaid and towards private-pay rental. The corporate additionally seeks to transform the communities to reminiscence care from assisted residing.
The operator believes the communities can “generate ROI by a mixture of capital funding and/or materials modifications to the communities’ enterprise plans,” in response to its newest earnings presentation.
Watermark, which was absolutely acquired by Keppel this 12 months, is endeavor an analogous plan to show round occupancy through reinvesting in neighborhood operations. As Boethel advised me, the corporate’s plan to get to 94% occupancy rests on injecting capital and a focus into its portfolio the place wanted.
Already, the corporate has separated gross sales and advertising into two completely different classes, and it has doubled the scale of its monetary planning and evaluation and asset administration group. Like Brookdale and Sonida, Watermark would possibly goal communities with occupancy within the seventieth percentile vary and infuse them with further assets, Boethel advised me.
“The extra knowledgeable that your operators are, and the extra armed they’re with the correct data and well timed data, the faster they’ll react and reply,” he mentioned.
Communities include senior residing’s ‘finest promoting level’
Wanting throughout the senior residing trade, I think there are a lot of extra operators with portfolios carrying uneven outcomes. That comes as no shock to anybody who has spent even a short while managing a senior residing portfolio, however in 2025 I feel different operators will look to those examples and take related methods.
Take into account that the top-occupied metro areas within the U.S. as of 1Q25 – Boston, Baltimore and Cincinnati – are all in locales with “comparatively excessive limitations to entry for growth,” mentioned Arick Morton, CEO of NIC MAP, final month. On the identical time, Miami, Houston and Atlanta – three markets the place building has traditionally been greater than others – ranked because the lowest-occupied main metro areas within the U.S., in response to NIC MAP.
NIC MAP has famous that the low fee of building has helped buoy nationwide occupancy averages in latest quarters. My level right here is that, though the info reveals nationwide occupancy is rising, provide and demand is the pressure pushing up these averages within the highest-occupied markets, not essentially distinctive operations. Whereas operators have hoped {that a} rising tide of demand will raise all boats, many nonetheless inform me that it’s what they do on the neighborhood degree that basically issues with potential residents on the finish of the day.
For instance, Heritage Communities Chief Advertising and marketing Officer Lacy Jungman shared with me throughout a latest gross sales and advertising webinar that the operator has a vp of buyer expertise to assist put together for the incoming child boomer technology.
The corporate is in 2025 placing {dollars} towards packages in eating and life enrichment, together with retaining gross sales employees, to speed up leads and move-ins within the “summer season promoting season.”
“What occurs inside the neighborhood is our greatest promoting level,” Jungman mentioned. “And so if we will actually do an awesome job with the expertise of our present households and residents, that may promote itself.”
Progress can also be on the thoughts of senior residing operators in 2025, and plenty of are wanting to increase for the quickly approaching child boomer technology. As growth stays robust to do, many operators are turning to third-party administration and acquisitions to scale up within the meantime.
The senior residing trade is also going through a wall of debt maturities coming due in 2025, and operators are feeling the stress from buyers and companions to enhance their outcomes, notably income and margins. I feel the rising occupancy fee nationally solely will increase stress on operators that also aren’t above stabilization in sure communities.
REITs comparable to Ventas (NYSE: VTR) and Welltower (NYSE: WELL) are already evaluating operators to at least one one other – at the very least on an nameless foundation – and are deploying assets to develop occupancy inside particular components of their working portfolios. And as these corporations search to purchase extra of the accessible senior residing belongings available on the market within the coming years, I imagine they are going to additional problem their working companions to drive higher outcomes throughout all their communities, not simply extremely performing subsets.
