Memory Care Sector Occupancy Bounces Back as Staffing Troubles Remain

Memory care was among the hardest-hit senior living segments in the early days of the Covid-19 pandemic. Two years and change later, many operators in the space are still recovering.

The arrival of Covid-19 tossed disruption into the sector, leading to historic lows in occupancy and a whirlwind of community transitions. While many memory care operators were able to subsist on needs-based demand, they also confronted some harrowing challenges along the way with regard to keeping residents safe and well.

But as dire as conditions were for memory care operators and residents in the early days of 2020, some are now looking to the future with more optimism as occupancy gains continue and new best practices with regard to labor and technology take root.


Anthem Memory Care is one company that has bounced back in recent months. In January, Irwin Investors chose Anthem to operate a portfolio of nine communities, bringing its number of communities to 21 and springing the operator into Michigan, Minnesota, Ohio, and Washington for the first time.

Lake Oswego, Oregon-based Anthem has also seen its overall occupancy recover to 80% in recent months to pre-Covid levels, with even more opportunity to grow census in the months ahead, according to CEO Isaac Scott.

However, even as occupancy recovers for memory care operators, several hurdles remain for future progress, namely staffing; and the general rising costs of doing business, which has outpaced rent growth in the space, according to Scott.


Even so, he also believes there is a path ahead for memory care operators to recover in 2022, and that the entire sector is looking forward to a day on the horizon when headwinds abate.

“Everybody’s feeling it,” Scott said. “Everybody is working their tail off to get to that bright sky.”

Occupancy turns a corner

On the whole, operators in the memory care segment saw a more severe dip in occupancy than the rest of the senior living industry during the pandemic. But, memory care operators also have had a stronger occupancy recovery since then.

Average memory care occupancy hit a record low of 74% in the first quarter of 2021, representing a drop of 930 basis points since the beginning of the pandemic, according to NIC MAP data.

But last year, average memory care occupancy began to turn a corner. In the first quarter of 2022, average memory care occupancy registered at 78%. Among standalone memory care operators, average occupancy in the first quarter was 77%.

As of the first quarter of 2022, there were approximately 8,200 memory care units under construction in the NIC MAP primary and secondary markets, equaling 5.3% of inventory. Freestanding memory care units under construction in 1Q22 totaled 1,100.

Memory care experienced record absorption in the third quarter of 2021, with approximately 3,700 units overall. Memory care operators in the first quarter of 2022 had weaker absorption with just 800 units absorbed, though that time of year is typically tough for move-ins.

A more recent executive insight survey from NIC shows how memory care demand has trended in recent weeks. In the latest survey, which was conducted between March 7 and April 3, 51% of memory care operators reported an acceleration of move-ins during that time. Just 4% said move-ins had slowed.

“The largest increases were in higher acuity settings such as memory care and nursing care, but substantial increases were noted for assisted living and independent living, as well,” wrote survey author and NIC Senior Principal Lana Peck.

Anthem in January added nine communities – which were struggling to recover occupancy lost during the pandemic – with a plan to add and train staff and implement new technology.

The company reported its best-ever sales month in the summer of 2021 and lead activity remains strong in the early months of 2022 – higher than it was during or even prior to the pandemic.

“There was a lot of pent-up demand coming out of Covid,” Scott said. “But once vaccines were proven effective, we saw a real surge not only in leads but in tours and in move-ins.”

Vancouver, Washington-based Sinceri Senior Living is another operator that has seen occupancy growth this year. The company’s portfolio of 78 communities in 35 states is composed of about 40% standalone memory care, with the rest being blended assisted living and memory care communities.

Although the company has grown quickly by taking on a whopping 47 communities in the last 12 months — including 21 properties with landlord Ventas (NYSE: VTR) late last year — CEO Chris Belford said occupancy for those communities is up about 50 basis points overall and growing.

“Inquiry levels have probably increased by 20% to 30%,” he told SHN in late March.

Some operators have taken the ongoing recovery period to try and reimagine what memory care is and can be to residents and their families. One such company is Bella Groves, which opened the doors of its first community in Bulverde, Texas in December.

The company offers a range of services in a three-tiered structure, from at-home education for families and caregivers of patients with dementia for $20 per month to full live-in memory care for residents for more than $7,500 per month.

“While a lot of people are focused on the struggles facing our industry, I think this is a perfect time to be asking questions and talking to non-traditional customers,” Lee told SHN.

Recovery hinges on labor

As with the rest of the senior living industry, memory care operators are laser-focused on recruiting new workers and cutting down on expensive agency staffing in 2022 as staffing headwinds continue.

It’s no secret staffing can be an Achilles heel, but that is especially true for memory care operators, as residents living in those communities often have more advanced care needs and require more assistance.

Some senior living operators have relied on culture as a differentiator when attracting new workers. Dallas-based Pegasus Senior Living follows that philosophy., according to COO Rich Williams.

Pegasus operates a portfolio of nearly 40 communities in 12 states. The company is particularly bullish on memory care, according to CEO Chris Hollister.

In addition to competitive wages, the company is focusing on maintaining work-life balance for workers in memory care communities – settings where burnout is common.

Pegasus has also undertaken renovations and upgrades at its communities not only as a way to attract new residents but also new workers. Included in the renovations, will be the addition of Pegasus’ Connections memory care program to two of its current communities.

“You want your teammates to be working in an environment that is pleasing to them,” said Williams.

Staffing is also the biggest challenge for Sinceri’s memory care operations. In particular, the company has had to rely on higher agency usage at communities in North Texas, where it is harder to bring in staff, according to Belford.

To mitigate those headwinds, the company is piloting a new full-time role that helps process and screen job applications.

“We’re getting a lot of feedback from the field that they really appreciate that,” Belford said.

There are also some signs that certain staffing headwinds are easing in 2022., For instance, Anthem relied on fewer agency staffers in February than in January, “and we’re expecting to see a further decrease in March,” Scott said.

Anthem also is seeing an increase in the number of job applicants it gets in its memory care communities.

“Employees are more motivated and enthusiastic about showing up for the interview, getting training, and staying on for that first 90 days,” said Scott.

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