Ventas’ Hutchens: Sidelined Referral Sources Could Drive Move-Ins 30% As They Return

As more senior housing providers complete Covid-19 vaccination clinics and infections decline, owners are expressing renewed confidence that a rebound in occupancy is closer than expected, despite predictions of a prolonged recovery by analysts.

Notably, even as lead generation has recently improved, some important sources of referrals have remained on the sidelines, Ventas (NYSE: VTR) Executive Vice President, Senior Housing, North America Justin Hutchens said Tuesday during the Citi Global Property CEO Conference.

He noted that the building blocks for the Chicago-based health care real estate investment trust have been in place for months, and that lead generation and move-in velocity improved prior to the most recent wave of positive Covid-19 cases last fall. Ventas netted positive occupancy gains in October, and was able to achieve this with lead generation at 86% of pre-pandemic levels, and identified a pool of referrals still on the sidelines — respite care, and personal and professional referrals.


If these sources return, Hutchens believes it could influence move-ins by another 25% to 30%, which would place Ventas’ move-in velocity above pre-pandemic levels, if achieved.

“Those are really important sources that will come back to the sector and our portfolio,” he said.

Ventas’ leadership team pointed to other statistics as signs that an occupancy rebound is around the corner. First, new leads and move-ins rebounded in January to their highest levels since the pandemic started — momentum that continued in February.


Second, 100% of Ventas’ U.S. assisted living and memory care facilities completed at least the first Covid-19 vaccine clinics, 91% have completed at least two vaccine clinics and full participation is expected by the end of March.

The vaccine clinics have had a tremendous impact on outbreaks. New resident cases of Covid-19 have decreased 98% since their peak in the second week of January, and new cases now average two cases per day, the lowest rates since the beginning of the pandemic.

“[Covid-19 is] being managed, and that’s been helped by the vaccines,” Hutchens said.

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Combined, Ventas expects to see some solid sequential revenue growth among its senior housing segment, CFO Bob Probst said. Demographic trends in the over-80 cohort, along with the importance of getting people in this age bracket into senior housing, are expected to drive powerful upside to the business.

Probst noted that Ventas lost $300 million in net operating income (NOI) in its senior housing operating portfolio (SHOP) last year — nearly all of that revenue, indicating that costs remained flat as operators found efficiencies to offset pandemic-related expenses.

“[This reinforces] the importance of driving volume through smart pricing,” he said.

Overall, the combination of the vaccine rollout and participation rates, along with the growing lead generation momentum, has Ventas CEO Deb Cafaro cautiously optimistic that a rebound is in sight.

But she stressed that although there is light at the end of the tunnel, the industry still needs to proceed with caution moving forward. Providers need to stay the course with safety and social distancing protocols, because the coronavirus will not be eliminated even as the vaccination effort continues to gain momentum.

“I actually feel better about senior housing, because we are ahead of the curve now in the vaccination rollout,” she said.

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