Brookdale Third Quarter Occupancy Spooks Investors

After Brookdale Senior Living Inc. (NYSE: BKD) released less-than-stellar earnings tied to slowing occupancy growth in the third quarter of the year, investors took a sledgehammer to the company’s share price, knocking it down on Nov. 6 to a new 52-week low of $8.85 a share.

On Nov. 9, the share price clawed back some of those losses early on along with a broader market rally, sitting at $9.36 a share, up around 3.7 percent (at 945 a.m. (ET)).

On Nov. 6, Brookdale said it experienced a net loss for the third quarter of 2026 of $13.9 million compared to $114.7 million for the third quarter of 2025. Adjusted EBITDA of $124.3 million for the quarter grew 12 percent over the third quarter of 2025.

Brookdale also said consolidated revenue per available unit (RevPAR) was up 7.5 percent year-over-year and it improved third quarter consolidated weighted average occupancy by 130 basis points year-over-year to 83.1 percent.

Summer Swoon

But company leaders said the RevPAR growth was not up to expectations.

"During the third quarter, we continued to make significant progress against our key objectives, and we experienced improvement in occupancy, rate, net loss, and Adjusted EBITDA," said Nick Stengle, Brookdale CEO. "While we achieved our quarterly plan for Adjusted EBITDA, we fell short of our RevPAR goal due to slower occupancy growth, particularly late in the quarter.”

Based primarily on third quarter occupancy carryover, additional marketing investments to bolster internal lead generation, and the expected revenue and expense impact of the recent fire at its 97-unit Clinton, Miss., community, the company revised its 2026 guidance to Adjusted EBITDA of $495 million to $502 million and RevPAR growth of 7.4 percent to 7.9 percent.

“We remain excited about our ability to address the compelling senior housing opportunity ahead of us, and we believe we remain well-positioned for longer-term Adjusted EBITDA growth in the mid-teens range,” Stengle said.

Digging Deeper

To explain the numbers in a more in-depth fashion, Dawn Kussow, Brookdale CFO, told analysts during the company earnings call that while RevPAR for the quarter increased the aforementioned 7.5 percent over the prior year, it was less than the approximate 8.2 percent level Brookdale anticipated for the quarter.

She said on a same-community basis, labor as a percentage of revenue improved 120 basis points year over year, reflecting the actions the company took during the quarter to bolster productivity, and same-community operating income growth accelerated to 7.4 percent year over year.

Although occupancy increased 70 basis points sequentially, it fell short of expectations during the third quarter, “traditionally our peak summer selling season,” Kussow said. “Based on current occupancy trends, we now expect full-year consolidated occupancy to come in below 83 percent,” she said.

Brookdale Senior Living resident fees for the third quarter were $707 million, a decline of 8.7 percent from the third quarter of 2025. The year-over-year revenue decline reflected a 15.3 percent reduction in consolidated average units driven by portfolio optimization activities, partially offset by a 7.5 percent increase in RevPAR.

“Improved RevPAR reflects the strong in-place rate increase we took in January of this year as well as tighter pricing discipline in the ensuing quarters. . .As anticipated, our consolidated RevPAR year-over-year growth accelerated sequentially, and occupancy and RevPOR are both running positive compared with last year,” she said.

“However, we do not expect to achieve the 8 percent to 9 percent RevPAR growth we had originally anticipated for 2026 mainly due to our lower occupancy achievement.”

Facility Operations

Kussow said Brookdale is making progress on managing facility operating expenses and anticipates slightly less of a headwind in the fourth quarter followed by more meaningful improvement in 2027.

“First, repairs and maintenance, or R&M, expense was elevated in the third quarter but somewhat improved versus the second quarter. During the quarter we began to drive changes in capital decision-making—essentially, whether to repair or to replace—down to the district and community levels,” she said.

“In recent years communities had emphasized repairs, whereas today we are taking a more proactive approach to emphasize the longer-term cost-benefit analysis of replacement instead of repair. We believe several million dollars of annual R&M expense could be reduced through our tightened capital decision-making process.”

Looking Ahead

Looking ahead to 2027, Kussow said there are a few main points to consider.

“First, the labor productivity actions taken mid-quarter will provide a tailwind to 2027. Secondly, other facility operating expenses year-over-year growth has been high this year due to a number of resolvable short-term factors, and we would expect a reversion to the historical mean over the next year,” she said.

“Finally, other 2026 activities, including the purchase of previously leased communities and reductions in G&A, will also benefit growth in 2027.”

For more information on the results, go to PowerPoint Presentation. And, for the transcript of the earnings call Brookdale presented for investors, go to Brookdale Senior Living Q3 2026 earnings call transcript.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.