Brookdale Turns Attention to Entry-Fee CCRC Sales in 2014

Brookdale Senior Living, Inc. (NYSE:BKD) is looking to build upon the success of its entry fee continuing care retirement community sales in 2014 after reporting strong fourth quarter and full-year 2013 results.

BKD reported its cash from facility operations (CFFO) increased 29% in the fourth quarter to $88.5 million, or $0.71 per share, compared to the fourth quarter of 2012. 

On a full-year basis for 2013, CFFO rose 17.6% to $308.5 million, or $2.50 per share, compared to the prior year. 


A fourth quarter highlight for BKD included $21.7 million of net cash flow as a result of its the company’s entry fee continuing care retirement communities (CCRCs) closing 130 independent living entry fee units, its executives said in discussing earnings with Wall Street analysts on Thursday. 

For the full year of 2013, independent living entry fee closings produced $57 million of net cash flow. 

“We remain very bullish regarding entry fee sales as we continue to work down our open inventory,” said CEO Andy Smith. “Our unsold inventory currently stands at 600 units and we believe this market will continue to firm up.”


Looking ahead, the company plans to focus more attention toward its entry fee marketing strategies in the following year.

“As I mentioned in my prepared remarks, we think we can do more around the entrance fee product line,” Smith said. “We think we can particularize our marketing message better there in 2014. So that’s an upside opportunity.”

Despite a fourth quarter net loss of nearly $1 million, BKD saw considerable occupancy growth of 30 basis points compared to the fourth quarter of 2012.

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Average occupancy for all Brookdale consolidated communities for the quarter was 89%, compared to 88.7% during the same quarter in 2012. 

Occupancy growth also translated into increased resident fee revenue, which was the largest contributor to the company’s total revenue growth.

Total revenue for the quarter was $734.2 million, a 5% year-over-year increase, while full-year 2013 revenue reached $2.9 billion, a gain of 4.5% from the previous year.

Of the $734.2 million, resident fee revenue comprised $638.6 million, representing an increase of 4.9% from the fourth quarter of 2012. 

For the full year of 2013, resident fee revenue increased from $2.4 billion to $2.5 billion. 

The company attributed occupancy increases to its marketing strategies in building the company’s national brand through print, broadcast and social media.

“Our results reflect increasing strength of the senior living sector’s fundamentals as well as the success of our key operational strategies,” Smith said. “We expect our ongoing investments in our systems, real estate assets, branding and operational excellence will continue to optimize value for all of our stakeholders in 2014 and beyond.” 

Written by Jason Oliva

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