Brookdale Senior Living pandemic recovery progressing with marketing strategy pivot, value-based care platform growth

A change in marketing strategy, the acquisition of 41 senior living communities and continued growth in its healthcare delivery platform marked continued momentum toward pre-pandemic recovery for Brookdale Senior Living.

The company’s occupancy growth was significantly better than historic seasonal trends, but not as robust as previous quarters, Brookdale President and CEO Lucinda “Cindy” Baier said Thursday during a third-quarter conference call. Third-quarter consolidated weighted average occupancy grew 130 basis points compared with the same quarter in 2023, to 78.9%, and 80 basis points over the second quarter.

Move-ins improved but remained below 2023’s rate, reflecting continued “softness” from two large third-party paid referral sources. Baier said this led the Tennessee-based senior living operator to redirect its marketing spend internally while working with those referral partners to improve performance. 

“I’m confident that all of our sales and marketing initiatives will support sustainable occupancy growth,” she said. “In our efforts to grow the top line, we remain intensely focused on our priority of returning to pre-pandemic occupancy levels of 89% in fourth quarter of 2013, while maintaining our steadfast community to profitable occupancy growth and to getting every available unit in service at the best possible rate.”

Brookdale, through its affiliates, operated 648 communities in 41 states as of Sept. 30. 

Value-based care program growth

In the fourth quarter, Baier said, Brookdale will expand its professional referral targeting around programs such as Brookdale HealthPlus, the company’s value-based care coordination program, and Clare Bridge, its evidence-based approach to memory care recognized by the Alzheimer’s Association.

In an update on HealthPlus, Baier said that the company more than doubled the number of communities operating the care delivery platform this year. She said that results from a third-party analysis of the program were “incredible” and found 80% fewer emergency department and urgent care visits, 66% fewer hospitalizations and a 61% higher annual wellness visit completion rate compared with similar individuals living in private homes and in other senior living communities. 

“These results reaffirm our belief that HealthPlus provides a key competitive advantage for Brookdale and its positive impact will grow even further,” she said, adding that Brookdale will complete its 2024 rollout of HealthPlus this month, bringing the total number of communities using the platform to 130. She said the company plans to explore further expansion of HealthPlus in 2025.

Ownership advantage

At the close of the quarter, Brookdale announced a series of transactions, including an agreement to buy 41 communities that it had been leasing. Those transactions, expected to close by year-end, were privately negotiated and occurred off-market.

By replacing its future lease obligations with an ownership structure, Baier said, the company will reduce its costs overall as well as add value opportunities and greater flexibility to its portfolio.

“Ownership allows us to take full advantage of the senior living industry’s positive growth outlook,” Baier said. 

In August, the company and Omega Healthcare Investors amended the existing master lease on 24 communities, which Brookdale will continue to lease from Omega. As part of the agreement, Omega agreed to fund $80 million in capital expenditures for the communities through Dec. 31, 2037. 

The year ahead

Looking ahead to 2025, Baier said that Brookdale will continue to pursue its key strategic priorities related to unit availability, workforce and resident and family trust and satisfaction. She said the company expects to deliver another year of steady and sustainable occupancy growth under those priorities.

“I am confident in Brookdale’s positioning for meaningful long-term growth, particularly if we make further progress toward restoring pre-pandemic occupancy levels,” Baier said. “This confidence is driven by favorable supply-demand dynamics, our continuous improvement in operational performance, and our resilient business model.”