NASHVILLE, Tenn. — Brookdale Senior Living Inc. (NYSE: BKD) completed the first quarter of 2020 with $369.5 million in profits, largely due to a series of asset sales, according to the company’s quarterly report. Brookdale now has $500.7 million cash on hand that it may need to ride out the negative effects of the COVID-19 pandemic.
The Nashville-based company, which is the largest operator of seniors housing in the United States reported it incurred $10 million in coronavirus-related expenses in the first quarter. Given that the full effect of the virus was only felt for a few weeks of that quarter, the company expects the second quarter expenses to rise even more. Additional expenses include personal protective equipment (PPE); medical equipment; cleaning and disposable food service supplies; enhanced cleaning and environmental sanitation costs; and increased labor expense.
The virus is also taking its tolls on tours and move-ins, as the company continues to keep any visitors out of its communities and potential residents shelter in place rather than look at making a move.
“We recognize these measures will continue to have a near-term financial impact,” says Lucinda Baier, Brookdale’s president and CEO. “Even so, these steps were necessary, given the critical role we play within the healthcare system to care for the most vulnerable segment of the population. We believe our efforts will ultimately strengthen our long-term growth opportunity.”
Prior to the pandemic, Brookdale was already having a very busy first quarter. The largest transaction involved selling Brookdale’s majority stake in 12 CCRCs to Healthpeak for $510 million. The buyer also paid Brookdale a $100 million termination fee to switch operators on the portfolio.
Brookdale’s stock price closed at $2.86 per share on Wednesday, May 6, down from $7.09 one year ago.