Brookdale Senior Living (NYSE: BKD) CEO Cindy Baier sees a real issue with the lack of middle-market senior living options for residents — she’s just not sure whether her company is going to compete in a big way for this consumer base.
“I don’t know Brookdale will ultimately play in that space,” Baier said during a discussion at the Jefferies 2019 Healthcare Conference in New York City Wednesday. “That’s something where you’d have to think through all of the ways that you would reengineer your business to provide that product.”
Brentwood, Tennessee-based Brookdale focuses more on age- and income-qualified customers who typically have an income level of at least $50,000 per year, she explained. But that doesn’t mean Baier isn’t concerned with the lack of more affordable senior living options, either.
“I think there’s work to be done to see if there is a way to provide support needed for seniors while having the ability to make a profit,” Baier said. “It’s certainly something that we and many others in the industry are thinking about because it’s an important issue for the nation.”
The issue has come to the fore recently, due to research from the National Investment Center for Seniors Housing & Care (NIC) and academic institutions, showing that 56% of middle-income seniors will be priced out of senior living by 2029, if today’s rates hold.
Since the release of this research, various companies have weighed in on the issue and their own intentions to go after this demographic. Tom DeRosa, CEO of real estate investment trust Welltower (NYSE: WELL), added his voice to the conversation on Wednesday, at a separate event in New York City.
For the time being, Brookdale is focused on balancing gains in occupancy with annual rate increases in order to grow RevPAR (revenue per available room). And on that front, the company appears to have the wind at its back, having just come off of a solid performance in the first quarter of 2019.
Looking ahead, Baier said she expects Brookdale’s occupancy to come out positive for the month of May, which is a full month or two earlier than the company has seen in previous years.
The provider also saw a 3.7% improvement in its resident rates between the fourth quarter of 2018 and the first quarter of this year. And, improving macroeconomic conditions have helped the company on the rate side
“We’re trying to maintain that balance between occupancy and rates,” Baier said. “For the first quarter, we outperformed the industry. I’d like to see us continue to do that.”
The post Brookdale CEO: We May Not Vie for Middle-Market Consumers appeared first on Senior Housing News.
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