2020 was a unique year in so many ways, challenging the senior living industry and companies operating within that sector.
But Scott White, chairman and CEO of Toronto-based Invesque, said during a fourth-quarter and full-year 2020 earnings call on Thursday that with “2020 in the rearview mirror, I am cautiously optimistic about where we’re headed in 2021 and beyond.”
White said that at the beginning of 2020, the healthcare real estate company had a strategic plan with a focus on portfolio management. Invesque made significant headway on that initiative last year, he said, by transitioning the majority of its former Greenfield Senior Living portfolio to Commonwealth Senior Living, and maximizing value in its Royal Senior Living portfolio through a combination of asset sales and transitioning the remaining portfolio in South Carolina to expand its strategic operating partnership with Phoenix Senior Living.
“But we’re not done yet,” White said. “We continue to look across our portfolio at each asset.”
Activity
The company closed out 2020 by closing on the purchase of a 32-unit memory care community in Rogers, AR, further expanding its private-pay portfolio. Invesque and Constant Care entered into a triple-net lease agreement that allows Invesque to consolidate the Rogers, AR, property into the company’s existing master lease with Constant Care. The acquisition increases Invesque’s relationship with Constant Care to eight properties.
The company also has completed expansion projects at three Commonwealth Senior Living communities in Virginia — adding nine one-bedroom assisted living units, activity space, renovated dining and new office space at the Commonwealth Senior Living at Abingdon; adding 14 one-bedroom and two studio-sized assisted living units at the Commonwealth Senior Living at Front Royal; and adding 10 one-bedroom units, activity space and new office space at the Commonwealth Senior Living at South Boston.
All three properties began admitting residents in the first quarter.
COVID-19
COVID-19 continues to create a challenging operating environment.
“The operating environment remained under stress through the end of the year and the beginning of 2021 for the entire industry given the current public health pandemic,” White said. “With that said, I am optimistic the industry will continue to recover over the long-term with broader availability of the vaccine.”
As of Thursday, 95% of residents at properties in Invesque’s portfolio had conducted first-dose COVID-19 vaccine clinics, and 89% had completed a second clinic. Communities that have not completed vaccine clinics are located outside the United States or are not designated as healthcare facilities and are coordinating vaccine administration for residents on their own.
As of March 5, the company said, 92 of its 105 senior living and skilled nursing properties experienced positive COVID-19 staff or resident cases in the past year. Currently, 32 residents or patients are being treated for coronavirus and quarantined. Of the 92 affected communities, 46 are in triple-net lease arrangements.
“We are encouraged about the prospects the rollout of the COVID-19 vaccine will have for ensuring the safety of our patients, residents and facility-level staff,” Chief Investment Officer Adlai Chester said. “Though cases have remained low relative to peak incidence in 2020, the risk of infection has constrained our operators’ ability to welcome new patients and residents.”
Chief Financial Officer Scott Higgs said the company’s triple-net leased and seniors housing operating properties occupancy for the fourth quarter were 79% and 84%, respectively. Operating partners saw occupancy declines in the fourth quarter and early in 2021 as COVID-19 positivity rates increased. Higgs said he expects to see that trend reverse, with occupancy trending positive during the second half of 2021 as a significant portion of residents are vaccinated and restrictions on visitation and move-ins are lifted.
White said it will take time to rebuild census and he believes the worst is behind the company in terms of occupancy declines. He added that he remains optimistic about the industry, as Invesque’s investment strategy is predicated, in part, on a “massive wave of aging baby boomers.”
“The pandemic did not change those demographic fundamentals,” White said. “As one of the youngest portfolios in the industry, we are well positioned for long-term success.”
