While the past year has been a difficult one for the senior housing industry, Invesque President and CEO Scott White said he has seen positive momentum in the company’s portfolio over the past few years. Last 45 days which he believes will continue into this year and into the next.
“While the first quarter presented many challenges for our operators and general industry fundamentals, I am pleased to report that many of our partners have seen a significant increase in inquiries, visits and moves to the over the past two months, ”White said Thursday during a first quarter earnings call. “We and our strategic operating partners are cautiously optimistic that this trend will continue.”
COVID-19 positivity rates within the portfolio have declined significantly over the past 45 days, with most US facilities in Invesque’s portfolio having passed through multiple vaccination clinics, the company said. As of May 7, Invesque operators have reported just five positive cases in a portfolio of 11,000 beds.
White said the positivity rate was a fraction of the peak activity seen in May 2020, when there were more than 700 cases of COVID-19 in the portfolio.
“As the operating environment continues to be stressed at the start of the middle of the first quarter, there appears to be a light at the end of the tunnel given the success of the vaccination initiative in North America,” White said. . “Our team has been very proactive in 2021 to strengthen and rationalize our portfolio. Asset sales and operator transitions will go a long way in preparing us for long-term strength and success.
“I am more optimistic than ever that the industry and business are on the cusp of a secular tailwind and will continue to recover in the long term.”
Invesque’s operational partners experienced a drop in occupancy in the fourth quarter of 2020 and early 2021 due to a significant increase in coronavirus cases across the country. As of December 31, the occupancy rate of its operating portfolio of triple net and senior housing was 77% and 83%, respectively. Compared to 2020 and 2019, the occupancy rate fell by 890 basis points (8.9%) in the leased portfolio and by 400 basis points (4%) in the occupancy portfolio of senior residences.
Chief Investment Officer Adlai Chester said he was cautiously optimistic that the accelerating trend of loss of occupation is leveling off and starting to reverse. He added that he was convinced that the industry as a whole may have hit rock bottom from an occupation perspective.
Commonwealth Senior Living recorded its highest number of moves in its 20-year history in March, according to Invesque, with the census continuing to rise every month. The final occupancy rate in April was up 80 basis points (0.8%) from March and 130 basis points (1.3%) from February.
The positive momentum, White said, indicates strong market demand for the healthcare real estate asset class and the long-term viability of its communities.
The real estate company is working to sell its stake in four properties to Inspirit Senior Living, which manages the communities, for $ 35.5 million. The deal is expected to close in the second quarter, Chester said.
Invesque also completed expansion projects in three Commonwealth of Virginia seniors communities, he said.
The company is seeing increased transaction activity in the market as the industry rebounds from COVID-19, Chester added. Invesque hopes to expand some existing operational relationships and will monitor transactions and continue to divest assets that are not essential or for which favorable prices can be obtained in the coming months, he said.