Brookdale Senior Living (BKD) Bets Big On Real Estate While Occupancy Lags

Brookdale Senior Living (BKD) reported a strong second-quarter performance on August 10, despite slower-than-expected occupancy growth. The company's full-year guidance includes 8% to 9% RevPAR growth and adjusted EBITDA between $502 million and $516 million. Brookdale acquired 244 units in Houston's Brookdale Galleria for $23.4 million and plans to close a skilled nursing wing at one of its leased communities, acquiring 17 other communities for approximately $157 million.

While occupancy growth has improved, Brookdale projects full-year consolidated occupancy at around 83%. The company's leverage remains high at 8.4 times adjusted EBITDA, but management expects it to reach below 6 times by the end of 2028. Hedge fund ownership of Brookdale rose to 62 funds, and short interest sits at 16.32% of float, indicating significant skepticism.

Despite the challenges, Brookdale's real estate acquisitions and operational efficiencies are expected to offset lower occupancy and keep the company on track for its adjusted EBITDA guidance.