Brookdale at Citi Conference: Strategic Growth and Market Leadership

On Tuesday, 04 March 2025, Brookdale Senior Living (NYSE: BKD) took center stage at Citi’s 30th Annual Global Property CEO Conference 2025. The discussion, led by CEO Cindy Beyer, highlighted Brookdale’s robust market position and strategic plans for growth in the senior living industry. The company emphasized its focus on sustainable growth and operational excellence, while also addressing challenges such as labor retention and potential regulatory impacts.

Key Takeaways

• Brookdale anticipates positive free cash flow in 2025, driven by strategic investments and operational efficiencies.
• The company focuses on a needs-based portfolio, with 70% in assisted living and memory care, compared to 50% for the industry.
• Brookdale’s revenue is largely private pay (94%), minimizing exposure to government funding changes.
• New lease agreements and real estate acquisitions are expected to enhance financial stability and growth.
• Brookdale Health Plus is reducing urgent care visits and hospitalizations, improving resident outcomes.

Financial Results

• 2024 RevPAR increased by 18% compared to 2019, with operating income per available unit up by 8%.
• Cash flow rose by 75% in 2023 and by 40% in 2024.
• The company expects to own more than 75% of its consolidated unit count by year-end, supporting its asset value.

Operational Updates

• Brookdale is outperforming normal seasonal trends in early 2025, with strong occupancy and pricing growth.
• The labor market has improved, with a 13 percentage point improvement in associate turnover in 2024 compared to 2023.
• Contract labor costs in 2024 returned to pre-pandemic levels, aiding cost control.

Future Outlook

• Brookdale plans to invest in existing communities and expand Brookdale Health Plus to 60 more locations in 2025.
• The company sees opportunities to acquire real estate at favorable prices, enhancing its market position.
• Demographic trends and constrained supply are expected to drive long-term occupancy and rate growth.

Q&A Highlights

• The renegotiation of the Ventas lease resolved a significant financial challenge, with Brookdale transitioning 44-45 properties to Ventas.
• Real estate acquisitions from Welltower and DHC include a mix of independent living, assisted living, and memory care units, enhancing Brookdale’s portfolio.
• The company is optimistic about the shift to value-based care, which allows seniors to receive more care within Brookdale communities.

Brookdale’s strategic initiatives and market leadership position it well for future growth. For a more detailed account of the conference call, please refer to the full transcript below.

Full transcript - Citi’s 30th Annual Global Property CEO Conference 2025:

Michael Griffin, Citi Research, Citi: Welcome to the 08:10AM session at Citi’s twenty twenty five Global Property CEO Conference. I’m Michael Griffin with Citi Research, and we’re pleased to have with us Brookdale and CEO, Cindy Baer. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC25 to submit questions. Cindy, I’ll turn it over to you to introduce Brookdale and the team, provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we’ll get into Q and A.

Cindy Beyer, President and CEO, Brookdale Senior Living: Great. Michael, thank you so much for having us. Jessica, and I are so grateful to be here today. My name is Cindy Beyer. I’m the President and CEO of Brookdale Senior Living, and it is just a fabulous time to think about investing in Brookdale today.

Let me start by saying that Brookdale is the premier operator of senior living communities, and we are entering an unprecedented period where we have great demographic growth from the aging population at the same time that we have very constrained inventory growth. They’re at near record lows. In fact, construction starts haven’t been this low since the great recession. The senior living industry is poised for outsized growth. And as a pure play in senior living, unlike others, we don’t have to worry about that growth rate being diluted by other businesses that have a slower growth potential.

The second reason that it’s important to invest in Brookdale senior living is that we’ve been very focused on profitable and sustainable growth, and this is very important for our future. If you look at our 2024 RevPAR, our RevPAR, our revenue per available unit, was 18% higher than in 2019. And if you look at our operating income per available unit, it was 8% better than 2019. And these results fully reflect the fact that we have a number of units that still aren’t in service for, residents. We have more than recovered our pre pandemic profitability per unit, and we have much more opportunity for growth than others because of where our occupancy is and because we have so many units that aren’t in service serving residents today.

As those units become occupied, it’s gonna drive higher RevPar and higher profitability for the company. The third reason that it’s a good time to invest in Brookdale Senior Living is that we have industry leading clinical expertise, and we have a greater concentration of assisted living and memory care in an increasingly needs based environment. The fourth reason is that 94% of our revenue is private pay, and what this means is that we aren’t as exposed to changes in either Medicaid or Medicare funding levels. And then if you wrap it up, our value as a company is underpinned by the real estate that we own. And by year end, we expect to own more than 75% of our consolidated unit count, so that gives a lot of value opportunity.

Michael Griffin, Citi Research, Citi: Great. Thank you for that overview. Maybe we’ll just start with the fundamentals you’re seeing in your business. As you touched on, the portfolio continues to recover both in terms of occupancy and rent growth. How confident are you in the strength of this recovery?

And what’s the outlook ahead for 2025?

Cindy Beyer, President and CEO, Brookdale Senior Living: I’m very confident in the recovery. And I think that this is a supply demand environment that we have been waiting for many, many years to come. So we believe that the supply and demand will provide a meaningful tailwind to senior living for many years to come. And there is significant opportunity for us to both grow occupancy and rate. And our, approach really has been to prioritize growth that balances, profitability from our occupancy increases.

Our actual rate balances affordability for our residents with the costs that are necessary to provide high quality services, including providing a return on the capital that’s required to operate our communities. If you look at our annual pricing increases and our annual occupancy growth, sometimes you’re going to grow rate more, sometimes you’re going to grow occupancy more. And we expect that there are going to be years where there’ll be larger price increases like 2023 and years that there will be smaller price increases like 2025. But it is important to note that our price increase in 2025 is still higher than our pre pandemic average increases were.

Michael Griffin, Citi Research, Citi: And have you noticed, just given the strong occupancy recovery and I think overall, the sector is above pre pandemic occupancies that seasonality has become more in effect. I mean, typically, we see that in the first quarter data. You guys report your monthly stats. It still seems strong from an occupancy perspective. But are you seeing any seasonality aspect before we get into that key selling season in the spring?

Cindy Beyer, President and CEO, Brookdale Senior Living: Yes. Our industry is definitely affected by seasonality. And if you look at our investor deck, we put together a page that shows what the normal seasonality would be. I’m very pleased to report that in January, and that has continued into February as well, we are outperforming our normal seasonality. Now usually what you see is in the first quarter of the year, you have more move outs than you do in other parts of the year.

And then as you get into the summer selling season, you see your number of move ins increase. So normally, you build occupancy sort of in that second and third quarter, and you lose occupancy in the first quarter. And that’s normally what you would expect. But we’re very pleased with the start that we have to the year and looking forward to the rest of the year.

Michael Griffin, Citi Research, Citi: And I believe your portfolio is concentrated more so in assisted living and memory care versus independent living. Why does this higher acuity setting make sense either from pricing or growth opportunity perspective relative to IO?

Cindy Beyer, President and CEO, Brookdale Senior Living: What I would say is that seniors face so many difficulties as they age. They have a greater need for long term care because of chronic conditions. There is a dramatic decline that we’ve seen over the past decade in the number of seniors compared to, caregivers. And then if you think about seniors being lonely, the loneliness epidemic is real, and it affects both the seniors’ physical health as well as their mental health. That makes needs based offerings so important.

Now Brookdale’s portfolio has 70% of the portfolio that is need based. That’s compared to approximately 50% for the industry, and we believe this is even more critical given the diverse needs of the population. Now Brookdale has differentiated itself through its clinical programs, including programs like Brookdale Health Plus, and that allows us to deliver both current and future residents with enhanced quality care and services in a highly effective and value added way. Now because we have, such a high concentration of assisted living and memory care, it’s important to note that an assisted living resident moves in about two years later. And they’re two years older than an independent living resident.

So that’s an important differentiation. It’s also important to know that we’ve intentionally grown the concentration of our portfolio in assisted living and memory care, and it’s 10 percentage points higher today than it was in 2017. And we’re doing that to, better match the needs of the population. Our job at Brookdale is really to capture, capture the opportunity by better serving our residents and also to provide an attractive return for our shareholders.

Michael Griffin, Citi Research, Citi: I think another big focus just on the industry overall is labor availability and demand and expense controls. So maybe can you talk about what you’re seeing on the ground at your facilities either from a wages, expenses, how best are your teams able to mitigate costs and how do you see that trending in the year ahead?

Cindy Beyer, President and CEO, Brookdale Senior Living: I’m really grateful that the labor market has continued to improve. Probably the most difficult labor market for us was in 2021. And every year since then, we have delivered improvements in both retention and turnover. In each of the last seven quarters, we have year over year improvement in our trailing twelve month associate turnover, and that supported more than 13 percentage points of improvement in 2024 compared to 2023. The reason that this is so important is that our our associate naturally become more productive as they, are with us longer.

It’s also really important that the associates build relationships with the residents that they’re serving. And so, in every quarter of 2024, we delivered favorable labor results as a percent of revenue. And at the same time, we improved our resident satisfaction that allowed us to stay focused on providing high quality care for our residents, meeting residents’ needs, and maintaining compliance with regulatory requirements. If I look at our contract labor in 2024, we were back to our pre pandemic inflation adjusted levels. Now I’ll say that with a difficult flu season in in January and whenever you have anything circulating, whether it’s flu or COVID or respiratory viruses, you may have a communities that need to use contract labor from time to time because you can’t have associates in your communities if they could potentially expose a resident to a virus.

Michael Griffin, Citi Research, Citi: Can you maybe give us a sense of what your customer acquisition strategy is and how do you effectively market to target your customer base?

Cindy Beyer, President and CEO, Brookdale Senior Living: So the best thing that you can do for a customer acquisition strategy is to delight your existing residents. That’s why we’re so focused on our net promoter score for our existing residents and we have that included in our bonus plans. But what we wanna do is we want to have residents who are happy with us because we help them better manage their clinical needs and the loneliness that they face amongst a community of friends. And we do that through programs like Brookdale Health Plus, which I mentioned earlier, and Brookdale Engagement Plus. So the most important part of what we do is delighting our existing customers.

And then for this reason, the the thing that I’m really proud of is that US News and World Report every year recognizes best of senior living companies. And in 2024, for the third year in a row, we had more best of, senior living communities than any other operator in the business. And at the same time, you wanna make sure that you’re attracting new customers to your business. So we have a very talented marketing team that has created a website that highlights our community capabilities as well as what differentiates them from the competition. We use digital marketing.

We use social media. We use direct mail to introduce our capabilities to new prospects. And then our sales team helps build relationships with professional referral sources and other community leaders, and they engage with prospects and their families to understand what’s getting harder for the senior and their family and to see if we can help.

Michael Griffin, Citi Research, Citi: We had a question, come in. In. This is kind of back to the seasonality point. But have you noticed, just given the kind of infection mitigation protocols we’ve seen during COVID, that there’s been a step function lower in the negative seasonality impact as a result of these protocols? You know, we’ve had a pretty bad flu season, this year, and it doesn’t seem to have impacted occupancy as much.

Cindy Beyer, President and CEO, Brookdale Senior Living: I am incredibly proud of our team. Brookdale has always been a leader in, clinical capabilities, and we have been doing vaccine clinics since well before COVID nineteen hit. And that’s something that our population of residents values very much. We have a very high percentage of our residents who choose to get vaccinated for the flu. At the same time, what COVID nineteen show taught us really is the importance of making sure that your communities are clean and sanitized, and if someone is is experiencing symptoms, that they’re isolated.

And so what I will say is that we’ve had great experience during this flu season despite this being one of the worst flu seasons in fifteen years in the metropolitan areas that we that we operate. So, that’s been fabulous. And I will say that we haven’t had a single flu closure this whole season. And I will say that as a result of that, what we said in our call was that January was a very strong month relative to seasonality. That continued into February.

And I will say also that one of the things that supported the seasonality benefit was our fourth quarter move ins were incredibly strong, and that sort of fourth quarter, occupancy pulls into the first quarter occupancy.

Michael Griffin, Citi Research, Citi: We’ve had a couple of questions come in just related to a transaction you had with, with a REIT that’s at this conference. So just the rationale about the change in the renewal agreement with the Ventas lease and the subsequent deal, which Ventas’ transitioning operators, How do you see this versus the properties that you continue to lease? And are you going to invest your capital in some of those properties?

Cindy Beyer, President and CEO, Brookdale Senior Living: So our new lease with Ventas solved Brookdale’s largest capital structure issue since I’ve been with the company. As we mentioned before we renegotiated the lease, we were losing more than $30,000,000 a year on that lease. And so what we needed to do is we needed to have a lease that provided Brookdale with the opportunity to operate high quality assets for a reasonable rent, right? If we’re going to lease a property, we want to make sure for our shareholders that we can generate positive cash flow from that. So we renewed roughly half of the lease, I guess, is the way that I would say it.

And the properties that we are renewing are strong properties. They have higher RevPAR, better performance than the rest of the properties. We will transition 44 properties, 45 properties to Ventas by the end of the year and they will sell about 11 properties between now and the end of the year. And what that will do for us is it will have a portfolio that we want to operate that we can continue to invest in those properties. And we’ll work very hard to make sure that the transition has as little disruption as possible for our residents, for our associates and for our shareholders.

Michael Griffin, Citi Research, Citi: I think on that cash flow point, I think the expectation for you is to generate positive free cash flow in 2025. What does the signal for the recovery in the business? And then what would you expect to use that positive free cash flow generation towards?

Cindy Beyer, President and CEO, Brookdale Senior Living: Yes. I will say that I’m really proud of the progress that we’ve made on our adjusted free cash flow. And we are expecting to generate meaningful adjusted free cash flow in 2025. If you look back, you’ll see that in 2023, we increased our cash flow 75%. In 2024, we increased our cash flow by about 40%.

And then in 2025, we’ll have another step forward. Now that doesn’t mean that every single quarter that we’ll have positive cash flow because there is seasonality to cash flows just like there’s seasonality to the business. In particularly, there are some significant cash outflows in the first quarter. But what I will say is we will continue to invest our resources to demonstrate the right return for our shareholders. And I do think that the investments that we’re making in our existing communities, in our associates, in our resident experience are going to be important.

And then not this year necessarily, but as you as you look to the future, I think that, I’d love to see us have some density in more markets, additional density, and I’d love to continue positioning our communities so that we’re going to be able to win and we will continue to win in those communities.

Michael Griffin, Citi Research, Citi: And I think to that end, maybe switching to kind of the transaction activity in the market, you announced the closing of a number of real estate acquisitions recently with some landlords. Why did this make sense for Brookdale to acquire these facilities? And would you expect longer term to try to acquire all the real estate? Or would you still expect to lease some from existing landlords?

Cindy Beyer, President and CEO, Brookdale Senior Living: The transactions that we announced and the two that we just completed last week are really great transactions for the Brookdale shareholders. And if you think about why they make so much sense is if you have a lease, it is a high and escalating cost of capital where and and at the end of the lease, basically, all the value you’ve created transitions to the operator of the or to the owner of the asset, not to the operator. So you’ve got to share the value that you create with the person who owns the real estate. We were able to acquire some very good assets, and we’re able to do that at a lower fixed cost structure. And so you’re basically able to have almost a guaranteed return from the day you buy the assets.

At the same time, you don’t have to worry about a misalignment of interests between the capital partner and the owner of the real estate. You can invest in the property knowing that you will operate it and knowing that you’ll be able to benefit from all the investments you make, not just CapEx investments, but in the people, the associates, and the residents. And so for that reason, they’re just absolutely great transactions. And we’re really proud of the assets, in particular, the Welltower assets that we acquired. These are very high quality assets.

They’re located in a fluent or very affluent markets. It’s about two seventy independent living units, 170 assisted living units and 132 memory care units. And then if I move to the DHC portfolio, that was 25 communities. And these, communities have certain communities that are well above our company average and has other communities that we may ultimately transition to other operators.

Michael Griffin, Citi Research, Citi: To that, and we had a question kind of come in over that. Given the increase in real estate ownership, would you ever look to either spin off the real estate into a REIT or convert to a REIT from a C Corp?

Cindy Beyer, President and CEO, Brookdale Senior Living: So as a management team, our primary obligation is to our shareholders and we’re going to do whatever makes sense for our shareholders. Having said that, when we’ve historically looked at this, it just hasn’t made sense as a value creation opportunity.

Michael Griffin, Citi Research, Citi: I think a big oh, sorry, question down there.

Cindy Beyer, President and CEO, Brookdale Senior Living: No. We would like, there are some there are some communities that are very small communities in that portfolio. The portfolio has some communities that only have, like, 19 units in it, so we may actually sell some of those really small communities. Yes. I’m sorry if I was confusing, but thank you for asking the clarifying question.

Michael Griffin, Citi Research, Citi: I had a question. If you were to look at your, and I I may be listed for Reuters. If you had all those state transactions,

Cindy Beyer, President and CEO, Brookdale Senior Living: Could you could you repeat the question? Oh, I see. So in the fourth quarter, we have expected that the adjusted EBITDA will be relatively neutral for the transition of the Ventas assets. The guidance that we do have reflected the fact that we expected to close the transactions that we just closed last week. And what I would say from an adjusted EBITDA standpoint, our adjusted EBITDA guidance is really based on making sure that we have guidance that reflects both the move ins and move outs that we have historically generated and that we’re capable of as well as strong cost control.

There may be a little bit of noise in the fourth quarter in particular as you look at communities exiting our portfolio. We’re going to take a little bit of time to make sure that our infrastructure is appropriately matched to the communities that we’re operating going forward. But I think we’re expecting it to be roughly adjusted EBITDA neutral in fourth quarter.

Michael Griffin, Citi Research, Citi: Maybe just following up on that line of questioning on the announcements that you had yesterday. You also included some financing transactions, debt capital providers. Are you seeing this as a opportunity to grow? Is this more opportunistic with these deals? Or could we see you do kind of subsequent transactions like this?

Cindy Beyer, President and CEO, Brookdale Senior Living: If you look back, we have entered into transactions with every single one of our large capital providers. And if you look over the next several years, I think we only have four communities that have leases that are coming up. So I feel really good about the fact that we have done some really significant transactions. I’m not suggesting that we won’t do more, but the opportunities aren’t as front and center as they were in the last twelve to eighteen months. And I think that if there’s ever a transaction that we can do that’s good for our shareholders, we’re always looking for win wins.

And sometimes what you find is that if you’ve got a partner, whether it’s a lease partner or someone else, you’ll periodically talk about things that could be good for both of you. And if the opportunity arises for something that’s good for both of us and for our shareholders, then of course, we would be looking at it.

Michael Griffin, Citi Research, Citi: Then I think another big topic that people are looking at in the senior housing space is just supply. The expectation is for it to remain muted for the near to medium term. But are you seeing anything in your markets or opportunities where supply might pick up or construction cost is still prohibitive to make the math pencil?

Cindy Beyer, President and CEO, Brookdale Senior Living: So if I look at Brookdale and I look at the industry, I think it is incredibly difficult to have new supply pencil out, particularly at your price points. So if you look at the transactions that we just did, we bought the assets at a discount to replacement value. And it’s really hard and it takes a really long period of time to build a new community. And so if I look at the next several years, I think we are going to be very well positioned as it relates to supply and demand. And if you think about the aging and accelerated demographic growth, and then you think about the supply being so constrained, and new construction starts at the lowest level since the Great Recession, that’s gonna continue for a while.

And then if you think about just the tariffs that were recently announced, that’s only gonna increase the cost of construction, which puts a further moat around our properties. So I would expect us to have many, many years of occupancy and rate growth, which should drive better profitability for our company and for our shareholders.

Michael Griffin, Citi Research, Citi: Is there a worry that either the tariffs or maybe changes in immigration policy could impact Brookdale’s portfolio operations?

Cindy Beyer, President and CEO, Brookdale Senior Living: What I’ll say is that the most of our costs are labor costs. About 65% of our cost base are the people that serve our residents. And our real estate costs, whether it’s lease or interest costs or sort of the next significant portion of the cost, we do have costs that could potentially be impacted, but they are the smallest part of our cost base. And we’ve been in contact with our procurement team and our suppliers, and we’ll take steps to mitigate the impact as much as possible. And then to the extent that there is an impact, we’ll take that into consideration for the selling rates that we have during the year.

And then next year in January when we do the resident rate increase, we would take that into consideration. As it relates to immigration, we make sure that the associates that we hire are eligible to work in The United States, and we’ve got a whole process that goes through how you validate that and and ensure that the the people are able to work. What I do think is that there’s going to be an impact in construction in particular, right? And so I think about that and the fact that that will increase the difficulty of having new construction, which is good for us. And so I think that the immigration should be more of a positive than a negative.

Michael Griffin, Citi Research, Citi: Had a couple of questions come in here. First one, I think you mentioned rental rate increases. What are you seeing in terms of anniversaries and the rate increases within your portfolio for existing residents?

Cindy Beyer, President and CEO, Brookdale Senior Living: We normally do our in place resident rate increases on January 1. Now, that doesn’t necessarily apply to Medicaid or Medicare. And our rate increase in 2025 was lower than 2024, but higher than sort of the pre pandemic rate increase. And I think that has been something that appropriately balances affordability for residents with the cost of providing high quality services.

Michael Griffin, Citi Research, Citi: And then you mentioned the Health Plus program. I was wondering if you could just expand on a little bit of this and the the value offering that the Brookdale offers.

Cindy Beyer, President and CEO, Brookdale Senior Living: I couldn’t be more excited about Health Plus. So today, we have Health Plus in a 29 communities. And if if you think about what we’re really trying to accomplish, we’re trying to help our residents live a better, healthier life for longer. And so last year, and for three years straight now, we have an independent third party that compares the outcomes of our residents who are in a Brookdale Health Plus community to similar residents with similar chronic conditions that live outside of the Health Plus communities, and the results are, again, incredible. So we found that 80% fewer urgent care or emergency room visits and sixty six percent fewer hospitalizations.

And so that is something that for the residents who live with us is truly impactful on their quality of life. And if you think about not just the positive resident outcomes, but the impact that it has on the rest of Brookdale, we are seeing that it has a positive impact on our operational results and our resident satisfaction ratings as well. Now we do expect to roll Health Plus out to about 60 additional communities in 2025. The Health Plus rollout will be to assisted living communities. We don’t offer Health Plus in independent living communities.

And the reason that we don’t offer it in independent living communities is because it’s a clinical program and independent living doesn’t have clinical included in it.

Michael Griffin, Citi Research, Citi: Maybe following up on that, how do you think the trend to value based care or aging in place at home could impact Brookdale?

Cindy Beyer, President and CEO, Brookdale Senior Living: I’m really excited about the change to value based care and care at home. And the reason that I’m excited is because it allows seniors to provide, to receive more care where they live, and that includes the Brookdale communities that they call home. Over the last several years, Brookdale has truly strengthened its health care, leadership, and we are well positioned to play a critical role in the health care continuum. Our value based care approach, like Brookdale Health Plus, addresses these concerns by having RN case managers who help our residents ensure that they’re getting preventative care. They are managing their chronic conditions.

It streamlines the care transition planning, and it also provides support to not just the resident, but also their family through education and engagement. And then we do a lot of tracking as it relates to, clinical outcomes. So if you are a value based provider, you should want your your patient or your member to live in a Brookdale community. And the reason that you should want that is because you’re gonna have lower costs because emergency room visits, hospitalizations are very expensive. And if you think about Brookdale Health Plus, eighty percent fewer emergency room visits for a similar resident and 66% fewer hospitalizations.

I can’t think of another operator who can demonstrate the high quality that their clinical programs have on their, on their residents, particularly anyone of scale.

Michael Griffin, Citi Research, Citi: Another one came in. What is the average RevPAR within your portfolio currently?

Cindy Beyer, President and CEO, Brookdale Senior Living: We really focus on RevPAR as opposed to RevPOR. And so as I’ve mentioned, we have made great progress on increasing our RevPAR and also our operating income per available unit. RevPAR will vary based on the mix of the portfolio, whether it’s independent living or skilled nursing. And so that bounces around from quarter to

Michael Griffin, Citi Research, Citi: quarter. I think you touched on a little bit in your prepared remarks that the potential changes in government payer sources wouldn’t directly impact majority of Brookdale’s business. But are there any regulatory issues or maybe things coming up in Washington that we should just kind of be cognizant of for the industry?

Cindy Beyer, President and CEO, Brookdale Senior Living: Yes. What I will say is I’m very grateful for the support that we have received from the government. And if there’s one thing that I’m grateful for from the pandemic is that it really highlighted the critically important role that senior housing plays in the nation’s overall health care system. So, you know, we spent a lot of time educating policymakers, educating HHS, during the pandemic about our industry and will continue to do so. I think it’s part of our role as the largest operator in the industry and will be proactive in terms of trying to shape any federal regulation to make sure it’s right for seniors and workable for our industry.

Given the outcome of the recent election, we expect less regulatory activity than there might have been in the near term, and we don’t expect any near term movement for federal regulation of our industry. We also are hopeful that certain proposals that may be less attractive for our industry could be rolled back.

Michael Griffin, Citi Research, Citi: We had a question come in, just kind of relating to some of the operating fundamentals in your portfolio versus some of the publicly traded REITs. How should we interpret kind of the whether it’s a lower level of same store NOI or occupancy or operating margins versus the shop portfolio of the publicly traded REITs?

Cindy Beyer, President and CEO, Brookdale Senior Living: It’s a really good question. And so I think the answer isn’t a single year answer, but I think it’s a multi year answer. There are really two paths that you could take to recovering from the pandemic. You could take a path of occupancy for occupancy sake or you could take a path of cash flow recovery. Basically, our view at Brookdale is that we want to generate positive, sustainable improvements in cash flow, which I said earlier, I was so proud of the fact that two years ago, we improved our adjusted free cash flow by 75%, almost 40% last year, and we have more than recovered our same store NOI 8% higher than sort of 2019.

But I will say that we took rate, a very large rate increase in 2023, and I think the the REITs took that increase sort of in 2024. So there’s a little bit of apples and oranges in terms of looking at just the last year. But I think that we are incredibly proud of the recovery that we’ve had in the per unit profitability. I’m not sure that others can say that. And so happy with where we are.

We do have a higher concentration in assisted living and memory care that has a lower margin rate, but it also has a higher margin dollar per resident. And then also the fact that their portfolios are lower acuity products. As I mentioned in our portfolio, we basically have an assisted living resident moves in about two years or nearly two years later in their age than the independent living. And I do think they’re skewed to lower acuity products.

Michael Griffin, Citi Research, Citi: Well, I think with that, we’ll finish with a couple of rapid fire questions. First one, what is your expectation for same store NOI growth for the shop industry overall, so not Brookdale specifically, in 2026?

Cindy Beyer, President and CEO, Brookdale Senior Living: I think the industry is going to have a great year in 2026, very favorable.

Michael Griffin, Citi Research, Citi: And will there be more, fewer or the same number of publicly traded senior housing operators a year from now?

Cindy Beyer, President and CEO, Brookdale Senior Living: I’m gonna say the same.

Michael Griffin, Citi Research, Citi: Wonderful. Thank you so much.

Cindy Beyer, President and CEO, Brookdale Senior Living: Thank you.

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