0001332349-26-000048
SEC filingResident fees declined 7.1% YoY due to community dispositions, but same community RevPAR grew 5.5% driving Adjusted EBITDA up 5.6%.
For the three months ended March 31, 2026, Brookdale reported resident fees of $722.5M, down 7.1% from $777.5M in the prior year period. The decline was driven by $93.1M in lost fees from community dispositions since Q1 2025, partially offset by a 5.5% increase in same community RevPAR (3.4% RevPOR growth and 170 bps occupancy improvement). Facility operating expense decreased 8.2% to $511.5M, primarily due to $72.0M less expense from disposed communities, partly offset by a 5.9% rise in same community costs from higher wages, insurance, and winter storm-related utilities. Net loss improved 89.4% to -$6.9M, benefiting from a $32.8M prior-year loss on extinguishment of a financing obligation and lower depreciation and lease expense. Adjusted EBITDA rose 5.6% to $131.1M, reflecting same community revenue growth outpacing expense increases.
Independent Living: Revenue fell 23.4% to $120.3M due to disposition of 15 communities. Same community RevPAR grew 7.3%, with RevPOR up 5.2% and occupancy up 160 bps to 84.4%. Operating expense declined 25.0%, but same community costs rose 6.3% on wages and insurance.
Assisted Living and Memory Care: Revenue decreased 1.9% to $523.2M as 62 communities were sold or terminated. Same community RevPAR increased 5.4% (3.2% RevPOR, 170 bps occupancy to 82.2%). Facility expense fell 2.9% overall, but same community costs rose 6.5% due to wages, insurance, and winter storm expenses.
CCRCs: Revenue dropped 9.2% to $78.9M on three community disposals. Same community RevPAR rose 3.9% with 210 bps occupancy improvement to 82.8% and 1.3% RevPOR growth. Expense fell 12.5% overall; same community costs increased 2.0% on wages and utilities.
Management continues its capital recycling program, having sold seven owned communities for $22.1M in Q1 2026 and three more for $88M post-quarter. Plans to sell 19 additional owned communities (1,438 units) in 2026, subject to market conditions. Total liquidity stood at $368.7M as of March 31, 2026, including $265.2M cash and $98.6M on the credit facility. The company expects to fund near-term needs from operations, cash, and credit facility availability. No specific quantitative guidance was provided, but focus remains on RevPAR growth, expense discipline, and portfolio optimization.
As of March 31, 2026, Brookdale held $265.2M in cash and equivalents, plus $4.9M in marketable securities, with total debt of $4,307.0M (including current portion). The company had negative shareholders' equity of $55.9M due to accumulated deficits. Restricted cash totaled $68.4M. Deferred revenue from resident fees and refundable fees was $65.8M. The credit facility had no borrowings but $1.4M in letters of credit outstanding.
No purchase commitments were disclosed beyond normal operating liabilities. The company's primary contractual obligations are its debt and lease agreements. As of March 31, 2026, Brookdale had $4.3B in total debt, with 89.3% being non-recourse property-level mortgages. Operating lease obligations amounted to $1.18B ($76.8M current, $1.11B non-current). Financing lease obligations totaled $25.3M. The company was in compliance with all financial covenants on debt and leases.
No share repurchases or dividends were undertaken during the quarter. The company's capital allocation focused on debt management and capital expenditures. Net debt increased by $14.5M, with $231.7M in new borrowings (including $184.9M from refinancing seven communities) and $217.9M in repayments. Capital expenditures totaled $53.2M (6.9% of revenue), primarily in Assisted Living ($31.7M) and Independent Living ($12.4M). Proceeds from asset sales were $22.1M.
Brookdale reports three operating segments plus All Other. Assisted Living and Memory Care generated the most revenue ($523.2M, 68.4% of total) and segment operating income ($150.3M). Independent Living saw a sharp revenue decline (-23.4% YoY) to $120.3M, while CCRCs fell 9.2% to $78.9M. All Other revenue increased 16.4% to $42.4M. Segment operating margins: Independent Living 35.9%, Assisted Living 28.7%, CCRCs 22.1%, All Other 12.7%. No geographic breakdown was provided.
Operating cash flow (CFO) of $20.9 million remained positive despite a net loss of $6.9 million, driven by significant non-cash charges: depreciation and amortization ($76.9 million), asset impairment ($6.1 million), and stock-based compensation ($3.7 million). These items more than offset the net loss and other adjustments. The $2.8 million loss on debt modification/extinguishment also added back. However, working capital was a net use: trade accounts payable decreased by $47.3 million, and prepaid insurance financed with notes payable increased by $20.2 million, partly offset by a $5.3 million decrease in prepaid expenses. Capital expenditures (capex) were $46.5 million, up from $41.8 million, reflecting continued investment in communities. Free cash flow (not explicitly stated) would be negative at -$25.6 million after subtracting capex, indicating reliance on financing. Investing activities used $29.7 million, primarily for capex and marketable securities purchases, but no major acquisitions occurred (versus $311 million in prior year). Financing activities used $0.5 million, composed of debt proceeds of $231.7 million offset by $217.9 million repayments and $7.6 million employee tax payments. Overall, cash generation from operations is insufficient to cover capex, but the company is actively managing its capital structure.