The COVID-19 pandemic has ushered in an era of unprecedented change in the world’s healthcare landscape.  Some of these changes may be temporary – lasting only until a vaccine or widespread testing is available – but others will have secured their place with consumers and will become permanently woven into the fabric of the healthcare system. There is an increased sense of uneasiness in visiting medical office buildings, urgent care sites, and hospitals, especially for routine checkups and minor ailments. Despite this apprehension, the level of care needed to support the United States’ population has not subsided.

It is a real concern that people may be deferring or delaying preventive care and physician visits out of a fear of getting infected, potentially allowing problems to remain undetected and untreated. In lieu of face-to-face health visits, telehealth has stepped in to bridge the gap, as individuals can now increasingly use interactive apps with audio and video capabilities to visit with their clinician for a broad array of services.

CMS Regulatory Changes Encourage Telehealth Adoption

CMS (Centers for Medicare and Medicaid Services) is taking aggressive regulatory action to allow for the rapid implementation and expansion of telehealth programs. Among these actions is a series of waivers intended to break down barriers so that patients can access these services and to ensure that providers are reimbursed for them. These actions are currently intended to remain in effect only during the coronavirus public health emergency. One can easily imagine that a tipping point may be reached during the pandemic, where telehealth is proven to be a viable solution to health needs and is ultimately embraced as fully in a post-COVID world as it is being embraced currently.

Prior to these waivers, health care professionals could only bill Medicare fee-for-service for patient care delivered by telehealth if the established-relationship rule was met, meaning the patient had been to an in-person, face-to-face visit with the provider at least once in the prior three years. CMS has clarified that the established-relationship rule will not be enforced during the state of public emergency.  Medicare’s originating site rule has also been waived, meaning that instead of providers needing to be in a medical office, community clinic, hospital, stroke unit, dialysis center, or other more traditional healthcare delivery site, providers can virtually treat patients from anywhere – including their home.

CMS is also temporarily breaking down state boundaries to allow providers to practice across state lines, giving patients in rural areas improved access to telemedicine while simultaneously preserving the nation’s frontline medical staff. Such measures are encouraging the utilization and adoption of telemedicine and preventing the spread of coronavirus.

What’s been made clear with the changes in the telemedicine regulatory environment is that CMS believes this practice is a viable channel for delivering care, if a patient’s condition doesn’t require more intensive hospital care. For routine physicals, prescription refills, and other minor ailments, telemedicine is a preferred conduit for obtaining care. What was intended to be a temporary measure during a public health emergency may have cemented a role in the future of our nation’s healthcare.

Benefits of Telemedicine Implementation

The COVID-19 pandemic has resulted in an extraordinary adoption in telemedicine by providers and patients alike and there’s no doubt that there are general benefits to expanded telehealth programs. Certainly, there is a convenience factor for patients who no longer experience long waits in a physician’s office waiting room. For frail elders and residents of seniors housing properties, however, the benefits are even greater. Those with a high risk of falling no longer need to hesitate when making appointments for fear of navigating parking structures and medical offices. Patients can rest easier knowing they can avoid potential exposure as telemedicine can connect them to specialized medical expertise to determine if they really require that trip to the hospital.

Residents of seniors housing and care properties that have established telemedicine programs are also able to rely on the expertise of on-site staff to use the remote equipment appropriately. For routine physicals and checkups, having an audio/visual connection will often suffice. But for more complex health problems, on-site staff are available to properly use the cameras, otoscopes, and stethoscopes that are making telemedicine technologies so robust. Having the staff onsite to assist with these remote office visits is delivering improved care to residents. Without this assistance, providers would not have access to the real-time vital signs and patient images that allow them to deliver high-quality care.

Establishing Telemedicine Programs in Seniors Housing and Care

Seniors housing and care providers had begun to experiment with telemedicine even before the coronavirus and COVID-19 pandemic became our reality. But in the new world we are living in, the pace at which properties are adopting and accepting this new form of care delivery is rapidly increasing.

Winter Park, Florida’s Holiday Retirement, the largest independent senior living provider in the U.S. announced in March that it has provided telehealth access and services to the residents of its 250+ senior living communities for urgent care situations and other conditions from the safety and comfort of their home. Senior leadership with Holiday indicated that partnering with MeMD’s national network of healthcare providers was in part a way to provide convenient care to residents, but also a larger strategy to reduce the stress on the United States’ healthcare delivery system. In the recently released Q1 2020 earnings report, Sabra Health Care REIT CEO Rick Matros commented that Holiday Retirement had done an effective job keeping infections low in their independent living buildings, in part due to the valuable rollout of their telemedicine program.Hh

Glendale, California-based senior living provider Front Porch Retirement Communities is working to expand the telehealth programs within the variety of senior living options they offer. As Kari Olson, chief innovation and technology officer indicates, “Any expansion of telehealth services is a very good thing, especially during this time when we need folks to stay home, and in particular, to safeguard people over 65 as well as other high-risk individuals.” Front Porch has been a proponent of telehealth for years, believing that telemedicine reduces barriers to accessing care, such as travel time and transportation risks.

Whether seniors housing and care providers are entering the world of telemedicine as a result of our new reality or they are expanding an already established telemedicine program, one thing is clear: telemedicine is proving itself to be a valuable aspect of care delivery in this country.

And the beat goes on as the new normal of living in a world of COVID-19 becomes our reality. However, the beat is not like any rhythm we have ever known. The pandemic has changed the pace of virtually every aspect of our lives and for those of us involved in caring for America’s elders who reside in seniors housing and skilled nursing properties, the challenge has been formidable, although not insurmountable. Despite impaired supply chains and a lack of federal coordination, operators are increasingly acquiring the personal protective equipment (PPE) that is needed to keep their staff and residents better protected from this invasive virus. While heroic stories of frontline care workers seldom make frontpage headlines, stories of carefully implemented safety protocols that limit the spread of the virus within properties abound. 

Images of well-planned opportunities for staff and residents to interact, socialize, exercise, and be engaged are common, yet little publicized. When we look back on this time, we will be proud of what the industry has collectively achieved in protecting our seniors in this difficult period. But we will also look back and be frustrated that circumstances were such that many people in the public at large as well as in congregate settings did become ill and, in some cases, die from this perilous virus.To prevent further spread of the COVID-19 virus, we continue to seek PPE. And of critical importance, the industry seeks extensive and reliable testing protocols, again for the general public, as well as for the staff working in and the vulnerable and often frail residents living in congregate settings. 

Against this background is the economy and the anguish it is unleashing on millions of workers. In just eight weeks, a staggeringly 36 million Americans have filed initial claims to collect unemployment insurance through the period ending May 9th, 2020. That is more than all the jobs created in the national economy since the time the economy began to recover from the 2008/09 recession and it potentially shrinks the job base to 116 million from 152 million at its peak, a level not seen since November 1994.  Moreover, the figure does not consider the millions of workers who have not yet or will not file claims. We can only expect more of these record-setting events in the months ahead. Separately in a different report, the BLS reported that the unemployment rate surged to 14.7% in April from a 50-year low of 3.5% as recently as February 2020.

The outlook is difficult to project because we still do not know when the pandemic will retreat and if it will return in the future. Its only once we discover a vaccine and it becomes easily replicated and people become immunized that we will really be able to put the pandemic behind us. Until then, we will gradually try to re-open parts of the economy, but the opening will be sputtered, and large groups of businesses may never re-open leaving workers on their own to seek new positions.

The federal government and the Federal Reserve have worked hard to mitigate the damage. Congress and the Administration have now allocated approximately $3 trillion on programs (equivalent to roughly 14% of U.S. GDP) within the CARES Act, the Small Business Administration Paycheck Protection Program (PPP) and other programs. Meanwhile the Fed has worked hard to keep the economy functioning and the credit markets liquid. It pushed the federal funds rate down by 150 basis points in mid-March to effectively zero, lowered the cost of discount window lending, introduced multiple facilities to support the flow of credit and launched the Main Street Lending Program to purchase new or expanded loans to small and mid-sized businesses including seniors housing. Fannie Mae and Freddie Mac have also announced assistance to borrowers, including seniors housing operators, by providing mortgage forbearance for 12 months and waiving related late fees.

Only in time will we know the success of these programs, but what we do know at this time is that much of the economy remains open, the credit system is still functioning, and relief is being provided to millions of jobless workers. Nevertheless, real GDP is still projected to drop by up to 40% at an annualized rate in the second quarter of this year.

The great uncertainty wrought by the pandemic and the economy has virtually shut down commercial real estate transactions markets, including seniors housing, with few deals getting done. Price discovery between buyers and sellers is opaque, at best, and capital is sitting on the sidelines waiting to see how these circumstances unfold.

All eyes are on operations. Move-ins have virtually stopped as operators strive to prevent contagion in their properties from the virus. And occupancy rates continue to decline as the weekly NIC Executive Survey results show. In the week ending May 10, 2020, approximately two-thirds to three-quarters of organizations reporting on their independent living, assisted living, memory care and nursing care units saw a decrease in occupancy from the prior month.  The Survey results also show that move-in rates continue to slow, with two-thirds to three-quarters of organizations reporting on their independent living, assisted living and memory care segments reporting a deceleration in move-ins.

Where it will end is hard to say, with the virus once again largely dictating the extent of business impact and disruption. In the meanwhile, operators remain fully diligent in their efforts to prevent further contagion, with strict protocols to prevent and limit the spread of the illness across properties. Extra cleaning and contact prevention protocols, limitations on visits, restrictions on group activities, travel restrictions and other rules have been implemented. And for staff, safety protocols, flexible schedules, and accommodations to the new reality of social distancing rules with school closures are all in place.

So, how do you operate in this environment? Contingency planning, scenario analysis, best case-worse case plans all need to be implemented to address the myriad paths that may unfold. From an investor’s point of view, property valuations may be pressured lower, but how much lower? What is the impact on investment returns? From a borrower’s point of view, banks will be looking for lower loan-to-values, stricter covenant agreements, and higher interest reserve requirements, but how much higher? From a broker’s point of view, fewer deals will be coming across desks at least for now, until distressed properties that require capital infusions and recapitalizations emerge, but when? From an operator’s point of view, occupancy rates will be pushed lowered, but by how much? If you are among the half of all properties that had an occupancy rate of 90% or greater as of the first quarter of 2020 by NIC MAP® metrics, the challenge may be large but not impossible. If you are among the 22% of properties with occupancy rates below 80% and in a market with generally low stabilized occupancy rates, the challenges may be greater.

In this time of unprecedented uncertainty and to be best prepared, one step forward would be for all businesses—capital providers and capital seekers–to create a worse case scenario and then ease up on the assumptions to identify the impact on the bottom line. Once there, better informed decisions can be thoughtfully considered.

In the meanwhile, on behalf of NIC, we continue to laud the industry’s frontline workers and those behind the scenes in management and decision-making roles. Cooperation has never been stronger between capital providers and operators, demonstrating that together, we can fight and overcome this pandemic.

A NIC report developed to provide timely insights from owners and C-suite operators and executives on the pulse of seniors housing and skilled nursing sectors.

NIC’s weekly Executive Survey of operators in seniors housing and skilled nursing is designed to deliver transparency into market fundamentals in the seniors housing and care space at a time where market conditions are rapidly changing—providing both capital providers and capital seekers with data as to how COVID-19 is impacting the space, helping leaders make informed decisions.

This week’s sample (Wave 6) includes responses collected May 4 – May 10, 2020 from owners and executives of 100 seniors housing and skilled nursing operators from across the nation. Detailed reports for each “wave” of the survey can be found on the NIC COVID-19 Resource Center under “Executive Survey Insights.”

This report also features two weeks of COVID-19 seniors housing and care incidence data collected April 27 – May 10 (Waves 5 and 6 combined) as reported by a subset of survey-takers.

Summary of Insights and Findings

While more data is needed to observe definitive turning points in occupancy rate trend data there are signs of potential improvements in occupancy patterns in the survey’s week-over-week data. In Wave 6, 21% of the respondents reporting on nursing care indicated that occupancy rates had started to increase, the most since the survey started. That said, 36% of respondents do continue to report declines in occupancy for skilled nursing from the prior week, although that is down from 67% in Wave 5. Respondents with independent living and memory care segment units also report slightly higher shares of improving occupancy rates from a week prior.

Other potentially positive signals include a slightly lower percentage of operators reporting decelerations of move-ins in Wave 6 relative to Wave 5—although the majority of organizations across all care segments did still report that move-ins decelerated in the past 30-days. Additionally, the percentage of respondents citing an organization-imposed ban on move-ins decreased from 59% in Wave 5 to 46% in Wave 6, and fewer respondents cited resident or family member concerns about moving residents in or out of communities.

• Regarding the change in occupancy from one week ago, the independent living and nursing care segments reported the most improvement from prior waves of the survey. The nursing care segment had the largest increase in the share of organizations reporting higher occupancy rates from the prior week (21%).
• The share of organizations reporting a deceleration in move-ins with regard to their nursing care segments in Wave 6 of the survey is lower compared to Wave 5 and Wave 3. Of note, 19% of organizations with nursing care beds report a deceleration in move-outs in the past 30-days in Wave 6, compared to 7% in Wave 5. Furthermore, under a quarter note an acceleration in move-outs, compared to around one-third in the prior three waves of the survey.
• The share of organizations reporting an acceleration in the pace of move-outs for the assisted living and memory care segments remain comparable to Wave 5 (around one-quarter), but higher than earlier waves of the survey. While the assisted living care segment saw a slight increase in the share of organizations experiencing a deceleration of move-outs compared to Wave 5, the memory care segment reported a slightly lower share.
• For the data collected between April 27 and May 10, 2020 (Waves 5 and 6 of the survey combined), a subset of seniors housing and care executives, answering on behalf of their organizations, provided the number of residents that were tested for COVID-19 and the number of residents tested positive by care segment.
• The operator average for the percentage of residents tested for COVID-19 by care segment rose with acuity level and ranged from 4.2% for independent living, 11.6% for assisted living, 14.1% for memory care and 21.0% for nursing care. The operator average of all residents with a lab-confirmed positive test for COVID-19 ranged from 0.3% for independent living, 1.3% for assisted living, 2.2% for memory care and 5.3% for nursing care. More detail can be found in the Key Survey Results section of this report.

Wave 6 Survey Demographics

• Responses were collected May 4 – May 10, 2020 from owners and executives of 100 seniors housing and skilled nursing operators from across the nation.
• Nearly two-thirds of respondents were exclusively for-profit providers (60%), about one-third (31%) were exclusively nonprofit providers, and 9% operate both for-profit and nonprofit seniors housing and care organizations.
• Owner/operators with 1 to 10 properties comprise 56% of the sample. Operators with 11 to 25 properties make up 26% while operators with 26 properties or more make up 18% of the sample.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 84% of the organizations operate seniors housing properties (IL, AL, MC), 26% operate nursing care properties, and 31% operate CCRCs (aka Life Plan Communities).

Key Survey Results

Pace of Move-Ins and Move-Outs

Respondents were asked: “Considering my organization’s entire portfolio of properties, overall, the pace of move-ins and move-outs by care segment in the past 30-days has…”

• In Wave 6 of the survey, between 66% and 70% of organizations reporting on their independent living, assisted living and memory care segments indicated that the pace of move-ins decelerated. However, between 26% and 28% report no change in the pace of move-ins for these care segments.
• Most of the organizations reporting on their nursing care segments in Wave 6 of the survey note a deceleration in move-ins (79%); however, the share is lower compared to Wave 5 (84%) and Wave 3 (87%).

Reasons for Deceleration in Move-Ins

Respondents were asked: “The deceleration in move-ins is due to…”

• The most common reason cited for deceleration in move-ins continues to be slowdowns in leads conversions/sales due to moratoriums of moving residents into communities to mitigate COVID-19 contagion among residents and the staff members who care for them.
• Fewer respondents in Wave 6 cited an organization-imposed ban on settling new residents into their communities (46%) compared to the prior two waves (59% and 61%, respectively). Additionally, fewer organizations in Wave 6 cited resident or family member concerns (45%) than in the prior three waves of the survey.

Move-Outs

• Between 58% and 74% of organizations reporting on their independent living, assisted living and memory care units saw no change in move-outs in the past 30-days. The share of organizations with independent living units reporting no change in move-outs has remained between 76% and 71% since Wave 4.
• The share of organizations reporting an acceleration in move-outs in the past 30-days for the assisted living and memory care segments remained comparable to Wave 5 (28% and 24%), but higher than Waves 4 and 3. The assisted living care segment, however, saw a slight increase in the share of organizations experiencing a deceleration of move-outs (14%) compared to Wave 5 (11%), while a slightly greater share with memory care units saw a slight decrease (from 14% to 11%).
• Until Wave 6, the pace of move-outs reported for the nursing care segment had been consistent across waves of the survey with around one-third of organizations with nursing care beds reporting an acceleration in move-outs. However, the pace of move-outs in Wave 6 slowed with under a quarter of survey respondents experiencing an acceleration in move-outs. Further, 19% of organizations with nursing care beds report a deceleration in move-outs in Wave 6 compared to 7% in Wave 5.

Change in Occupancy by Care Segment

Respondents were asked: “Considering the entire portfolio of properties, overall, my organization’s occupancy rates by care segment are… (Most Recent Occupancy, Occupancy One Month Ago, Occupancy One Week Ago, Percent 0-100)”

• In similar proportions to Wave 5, approximately one-half to more than two-thirds (54% to 71%) of organizations reporting on their independent living and assisted living segment units, and 79% of organizations reporting on their nursing care beds in Wave 6 of the survey—across their respective portfolios of properties—experienced a decrease in occupancy from the prior month.
• The share of organizations with memory care units reporting a decline in occupancy rates fell from 70% in Wave 5 to 63% in Wave 6, and more than one third (36%) noted either no change or an increase in occupancy from the prior month.

• The independent living segment saw the highest share of organizations reporting an increase in occupancy from one month prior (13%).
• The percent of organizations reporting nursing care segment occupancy declines in Wave 6 was equal to Wave 5 (79%) and down slightly from 84% in Wave 3.
• Regarding the change in occupancy from one week ago, the independent living and nursing care segments reported the most improvement from prior waves of the survey. In Wave 6, 84% of organizations with independent living units and 63% of organizations with nursing care beds saw no change or an increase in occupancy rates.
• The nursing care segment had the largest increase in share of organizations reporting higher occupancy rates from the prior week (21%). More organizations with assisted living units note no change in occupancy rates from the prior week than in previous waves of the study (63%).

Incidence of COVID-19 Among Survey Respondents

For the data collected between April 27 and May 10, 2020 (Waves 5 and 6 combined), seniors housing and care executives, answering on behalf of their organizations, provided the number of residents that were tested for COVID-19 and the number of residents that tested positive by care segment. 

• The COVID-19 incidence data is a self-reported, non-validated sampling of seniors housing and care owners and operator executives for the two-week timeframe. It is important to note that this sample is not a statistical representation of COVID-19 incidence in seniors housing and care, in general.

• As shown in the table, in this sample of survey respondents, the percentage of residents that were tested for COVID-19 by care segment rose with acuity level and the operator average percent of residents tested ranged from 4.2% for independent living, 11.6% for assisted living, 14.1% for memory care and 21.0% for nursing care. The operator average percent of all residents that had a lab-confirmed positive test for COVID-19 ranged from 0.3% for independent living, 1.3% for assisted living, 2.2% for memory care and 5.3% for nursing care.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to bring clarity and transparency into market fundamentals in the seniors housing and care space at a time where trends are rapidly changing. Your support helps provide both capital providers and capital seekers with data as to how COVID-19 is impacting the space, helping leaders make informed decisions. 

If you are an owner or C-suite executive of seniors housing and care properties and have not received an email invitation but would like to participate in the current Executive Survey, please click here for the current online questionnaire.

NIC’s popular “Leadership Huddle” series of webinars continued on May 7, again drawing well over a thousand registrations. “Confronting the New “Normal”: A Conversation between Operators, Lenders and Private Equity Providers During a Pandemic,” featured another panel of senior decision-makers, discussing what they’ve learned and how they’re managing their businesses at this stage of the pandemic. One of the nation’s largest assisted living operators, a leading debt provider, and a major private equity provider were all on-hand to discuss the pandemic’s impact on operations, financing, current and future investments – and people – as the crisis continues.

As with previous “huddles,” the discussion, moderated by NIC Chief Economist Beth Mace, began with a presentation of the latest data and insights from the weekly Executive Survey, which showed a majority of survey respondents continuing to site softer occupancy rates and a deceleration in move-ins.

John Moore, Chairman and CEO of Atria Senior Living, provided analysis that he and his team have been conducting since the pandemic first hit Atria in early March. Using daily COVID-19 testing data, Moore’s team has been able to track the virus’ progressive spread, peak, and stabilization, particularly in the New York area, where the company has a concentration of properties. His charts offer a startling image of an outbreak that, at its peak, saw infection rate, as a percentage of tests conducted reach as high as 56% in one day in April. While his presentation offers hope that the virus has peaked in New York, it also indicates that the virus is still a threat throughout much of the nation.

Using available daily data, the Atria team has been able to make timely decisions as it reacted to the pandemic. A report the company recently released on its website and addressed to “the extended Atria family” features statistics on the numerous activities the company has engaged in. Armed with its data, Moore’s team was able to pre-supply New York area properties with PPE, which the company had previously purchased and warehoused, ahead of the peak. They also hired over 1,000 additional staff, provided food for staff, as well as N95 masks and PPE for those staff members commuting in the New York-area and their families.

The approach was creative and entrepreneurial: “We started buying PPE early. We have a kitchen supply vendor here in Louisville who has a warehouse and was out of business so we took it over…we centralized PPE and shipped it from there.” Moore’s presentation included images from the warehouse, as well as an air-freighter they hired to distribute equipment. The company also now has its own brand of hand-sanitizer, “We know a guy who knows a guy who has a still and we made five million gallons of hand sanitizer,” Moore said. The company also has proactively produced information, including templated letters and communications, for Executive Directors to use when impacted. The report can be found on Atriaseniorliving.com.

From the perspective of Steve Blazejewski, Managing Director at PGIM Real Estate, navigating the pandemic has been more about communicating with both operators and investors. “I think our role really has been one of support for our operators, and then communication the other way, to our clients,” he said. He described approving wage increases and other expenses, such as food, PPE, and other supply needs.

As a lender, Chris Taylor, Managing Director at Capital One Healthcare Real Estate, expressed how pleased he’s been with his operators: “We’ve been really, really impressed with the operators and how they’ve responded to this…it reminds me why we are active in this space. We put the residents and their care and service first.”

When asked about what activity is currently occurring in his business, Taylor indicated his team is focused on their existing portfolio and handling any issues that might arise. Looking ahead, he expressed hope that activity will pick up, “As weeks and months go by and people start to conclude what the new normal is, it will be time to look at more opportunities. I think we’ll see more of that, but frankly, deal activity has been relatively low.”

Blazejewski is also taking a, “pause, and wait and see” approach: “For the deals that we do have, particularly on developments, we’re trying to, frankly, take some more time until we get better visibility, just in terms of where the economic recovery is going to be, how long it’s going to take, what’s going to happen to labor costs, what’s going to happen to construction costs, and things like that.” He also explained that the acquisition pipeline is “on ice right now…It’s really difficult to pursue an acquisition of some size when you can’t even walk a building or tour it, you can’t get anyone to come into the building to inspect it, you can’t get your license because a lot of government offices have shut down.”

Capital markets, meanwhile, “lack clarity,” according to Blazejewski. “There’s very little pricing discovery right now, and we’re seeing a very significant bid/ask spread on various deals.” However, he expressed optimism on the sector, “We still think seniors housing has a very bright future. We’re conscious of where we are in the cycle, and we need to be making decisions for the medium and long-term, but obviously the immediate conditions and the current situation have impacted decision-making.”

Mace asked panelists for their thoughts on the “headline risk” faced by the sector, noting that papers are featuring headline stories on the pandemic’s impact on nursing homes on a daily basis. Blazejewski pointed out that media reports often fail to differentiate seniors housing from skilled nursing, “There have been a lot of articles in the Wall Street Journal and other publications…that do conflate the two. We think that is generally inaccurate and we do try to combat that, where we can.” He also expressed concern on the data coming out in reports, “I think we have a lot of blurry data right now. It’s going to be very difficult to dig through that and determine what the real success rate or failure rate was, for performance.”

Answering the same question, Taylor said, “I think we have a huge opportunity as an industry to really show how we differentiated ourselves, versus the general population, in taking care of seniors.” Asked about his anticipation of challenges, such as write-downs and recapitalizations in his portfolio, he responded, “It’s way too early to talk about whether we’ll have challenges in the portfolio to that level,” and expressed a willingness to work with his partners over the long-term.

Blazejewski also see opportunity, “I do think there’ll be probably 6-12 months of pain in terms of cap rates. We think that may provide some opportunity for us, in terms of buying, as long-term investors and holders.” He also anticipates a return to dynamics like those of just a few months ago, “where Class A cap rates might have been 5% or 6%. I still think it’ll be there in a couple of years. You still have a demographic wave coming. That’s not going to change. I still think you’re going to have strong investor interest in the space, and I still think you’re going to see a lot of searching for yields in the capital markets and from institutional investors.”

As he looks ahead, Moore expects current projects, nearing completion, to go ahead with opening plans. His team is currently testing all of their employees and will open new properties in New York and San Francisco with further testing of new hires, and potentially also periodic testing. He said, “As testing opens up, that could be a breakthrough for seniors housing, and new growth.” He described new procedures for move-ins, which include testing, quarantine, full-PPE, and new technological tools designed to keep residents and families safely connected. “Technology is becoming a bigger deal for everybody, and not just in communicating. We’re about to roll out an app for family members, so they’ll be able to see what their mom’s or dad’s temperatures were on our daily temp checks.”

Asked about telehealth, Moore responded that they’re using it more, “Hospitals are aggressively opening up to telehealth networks.” He described deals with healthcare providers, such as Northwell, on Long Island, delivering telehealth urgent care to many of his communities.

Taylor also sees continued cooperation with healthcare partners: “I do think we will continue, as NIC is highlighting, to emphasize the relationships between seniors housing and care providers and the healthcare system.”

Wrapping up the discussion, panelists were asked to summarize their current thinking, and field questions submitted by attendees. Blazejewski sees that the crisis is no longer in its earliest stages, but still presents plenty of uncertainty. He’s engaged in planning for numerous different scenarios. Mace also emphasized that scenario-planning will be very important, pointing to a just-published NIC Insider article she wrote, encouraging the practice for planners.

All the panelists, while agreeing that the sector’s fundamentals remain strong, also agreed that macroeconomic factors, as we head into a recession and face uncertainty, will likely play an important role in the sector’s future. For now, though, Moore, as he decides how to proceed, is looking at data on the penetration of the virus on a daily basis, and is still focused on adhering to strict protocols, and testing staff, to keep his residents safe every day.

The Labor Department reported that there were a nose-bleedingly high 20.5 million jobs lost in April as the COVID-19 pandemic closed much of the economy and triggered massive layoffs and furloughs of employees by U.S. businesses. This dwarfed the previous record high job loss of 1.96 million jobs in 1945 at the end of WWII and the 8.7 million jobs lost during the entire last recession. Employment is now at its lowest level since February 2011. April’s decline also marked the second monthly decline in jobs after a record 113 consecutive months of job gains.  

Separately, the April unemployment rate surged to 14.7%, up from 4.4% in March and from a 50-year low of 3.5% in February. This is the highest jobless level since the Great Depression according to the Labor Department figures that date back to the 1940s and the National Bureau of Economic Research data prior to that. During the 2008/2009 recession, the unemployment rate peaked at 10%.

The underemployment rate or the U-6 jobless rate soared to 22.7% in April from 8.7%. This figure includes those who have quit looking for a job because they are discouraged about their prospects and people working part-time but desiring a full work week. In the previous 2008/2009 recession, this rate peaked at 17.2%.

Employment fell sharply in all major industry sectors, with particularly heavy job losses in leisure and hospitality. Employment in health care fell by 1.4 million in April. The decline in healthcare reflects those not working to fight the pandemic because they are seeing fewer patients for routine checkups and, in some cases, only offering emergency procedures.

Revisions also subtracted thousands of jobs in the prior two months. The change in total nonfarm payroll employment for February was revised down by 45,000 from a gain of 275,000 to a gain of 230,000 and the change for March was revised down by 169,000 from a loss of 701,000 to a loss of 870,000. Combined, 214,000 jobs were subtracted to the original estimates. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.

Average hourly earnings for all employees on private nonfarm payrolls rose in April by $1.34 to $30.01, a 7.9% increase from year-earlier levels. The increases in average hourly earnings largely reflect the substantial job losses among lower-paid workers, which put upward pressure on the average hourly earnings estimate.

The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work fell 2.5 percentage point to 60.2%. Total employment, as measured by the household survey fell by 22.4 million to 133.4 million.

Separately yesterday, the Department of Labor reported that 3.2 million Americans filed for unemployment insurance benefits in the week ending May 2, 2020. In the past seven weeks, 33 million people have filed claims.

Today’s report was not unexpected as the pandemic has dramatically halted economic activity across the nation and globe. The question becomes how long the devastation will continue, which in turn largely depends on COVID-19 related factors such as when a vaccine become available, testing of the general population and when business are able to reopen. Even then while some businesses may gradually return to “normal”, not every sector will recover at the same pace. In the meanwhile, and tragically, millions of people are suffering from illnesses, anxieties and deaths associated with the pandemic and from the human tragedies associated with of the collapse in the national and global economies.