Why Brookdale Senior Living Stock Rose as Much as 13% on July 27
At one point in early trading on July 27, shares of Brookdale Senior Living (NYSE: BKD) were up by roughly 13.5%. An agreement the senior housing operator reached with key landlord Ventas (NYSE: VTR) was the main driver of the excitement. For its part, at the worst point in morning trading, Ventas was down a few percentage points. Both stocks reversed course and by roughly 2:30 p.m. Wall Street time, Brookdale was up just 2% or so and Ventas down less than 1%.
The big news really ties back to COVID-19, which is having a huge impact on senior housing facilities. Seniors appear to be particularly susceptible to the illness, and it spreads easily in group settings. Senior housing is specifically designed to bring older adults together in one place. Costs have increased because of heightened cleaning and safety requirements. The flow of new residents has slowed, as facilities shut or limit access to non-residents for tours, among other things. And move outs -- a mixture of increased resident deaths and families bringing their loved ones home out of concern for their wellbeing -- have been elevated. It's a terrible situation for companies like Brookdale, translating to rising costs at the same time the company is dealing with falling revenue.
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Source Fool.com
