How COVID-19 Has Affected Assisted Living Operators
Assisted living facilities were among the hardest hit when COVID-19 began to spread in the United States back in late February. These facilities house an extremely vulnerable population and when the virus started to rapidly spread, assisted living residents found themselves at the epicenter of the disease. The Centers for Disease Control and Prevention (CDC) explained early on that the older population wasn’t just at risk of getting COVID-19, but would likely develop more severe symptoms that would require hospitalization. Over the last six months, we’ve seen firsthand how assisted living communities have grappled with the repercussions from the virus and the toll it has taken on residents and staff alike.
According to a survey by the National Center for Assisted Living (NCAL), half of all assisted living facilities are operating at a loss because of COVID-19. Under federal direction, nursing homes throughout the country have received funding, but the same cannot be said for assisted living communities. Just 15 percent of providers have received funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Fund, and less than half are eligible for aid. Without any government assistance, many assisted living providers have had to close their doors and indicate they will not be able to maintain operations for another year as COVID-19 remains a growing concern. While occupancy levels are slowly increasing as facilities embrace safer practices, many within the industry predict it will take 18 to 24 months for assisted living occupancy levels to stabilize.
Assisted Living Facilities Face Financial Crisis
Although nursing homes have received a lot of media attention in regards to COVID-19, assisted living facilities are facing similar problems. 64 percent of providers are concerned they will be unable to maintain operations into 2021 if costs continue to increase and revenue doesn’t bounce back. According to the NCAL, these facilities are also dealing with rising costs in the following areas:
Personal Protective Equipment (grown by 95 percent)
Cleaning supplies (50 percent)
Hero pay for essential workers (50 percent)
Hiring additional workers (35 percent)
COVID-19 testing for residents and staff (29 percent)
What Does This Mean for Assisted Living Operators?
Operators must continue to pivot and find creative ways to support assisted living communities as we prepare for a possible second wave of COVID-19 cases. Many providers have taken matters into their own hands, working with others within the community to maintain operations and keep residents and staff safe. Because the majority of assisted living communities in California are private, aid from the government isn’t likely.
While the virus will eventually be something we look at through the rearview mirror, it has forever changed the senior housing industry. We fully expect occupancy rates to recover, as the coronavirus will not eliminate the need for these facilities, especially as the Boomer generation gets older. Assisted living operators remain hopeful that financial aid is coming, but if your facility has been affected by the pandemic, we encourage you to contact Sherman & Roylance Real Estate Investment Services and ask about your options. Our knowledgeable team will help you navigate these uncertain times and find the best option for your needs. Whether you are looking to buy, sell, or lease long-term care or senior housing facilities, give us a call today.