Earnings

Brookdale Lowers 2026 Earnings Forecast To $495 Million–$502 Million As Occupancy Disappoints

Higher quarterly adjusted earnings gave way to a lower outlook, with extra marketing costs and a Mississippi community fire also weighing.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

— 3 min read
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Brookdale Lowers 2026 Earnings Forecast To $495 Million–$502 Million As Occupancy Disappoints

Brookdale Senior Living, which operates senior housing and care communities, cut its 2026 adjusted EBITDA outlook Friday to $495 million–$502 million, from $502 million–$516 million, according to its earnings release accompanying an 8-K. Management cited weaker-than-planned occupancy growth, more marketing spending and the expected financial effects of a fire at its vacant Clinton, Mississippi, community.

Occupancy Gains Missed The Goal

Brookdale also reduced its forecast for growth in average monthly resident revenue per available housing unit to 7.4%–7.9%, versus 8.0%–9.0% previously. Adjusted EBITDA measures earnings before interest, taxes, depreciation, amortization and other items the company excludes.

The third quarter met management’s adjusted EBITDA plan but missed its revenue-per-unit objective. Nick Stengle, Brookdale’s chief executive officer, attributed the shortfall to “slower occupancy growth, particularly late in the quarter.” The revised outlook includes estimates of lost revenue and expenses from the fire at the 97-unit Clinton property.

Companywide weighted average occupancy reached 83.1%, compared with 81.8% a year earlier. Monthly revenue per available unit rose 7.5% to $5,546. Those improvements were insufficient to preserve the annual forecast.

BKD shares plunged about 15% to $9.23 in Friday trading, with a market value of $2.6 billion.

A Smaller Portfolio, Lower Rent

Quarterly adjusted EBITDA increased 12.0% to $124.3 million from $111.1 million. Brookdale’s net loss narrowed to $13.9 million from $114.7 million, primarily because non-cash impairment charges fell by $58.2 million and depreciation and amortization expense declined by $20.5 million.

Resident fees fell to $707.3 million from $775.1 million, but that comparison includes a shrinking portfolio. Brookdale ended leases on 57 communities with 6,294 units in the second half of 2025. Community dispositions reduced third-quarter resident fees by $106.4 million and facility operating expenses by $87.3 million.

Across 515 communities operating throughout both comparison periods, resident fees instead grew 5.3% to $693.0 million from $657.8 million. Their operating expenses rose 4.5%, with higher wages, insurance estimates, utilities and maintenance among the causes. Companywide cash operating rent payments fell to $43.2 million from $56.7 million as leases ended.

Brookdale provides independent living, assisted living, memory care and continuing care retirement services. As of September 30, it operated and managed 529 communities across 41 states, with capacity for approximately 45,000 residents.

Buying Communities To Reduce Rent

Brookdale expects its $290.0 million purchase of 30 leased communities, agreed in October, to close in the fourth quarter. Management expects the purchase to reduce annual cash rent payments in 2027 by approximately $17.8 million; funding would come from cash and property-backed mortgage debt.

The company completed a separate purchase of 17 formerly leased communities in September for $157.4 million, plus $2.6 million in transaction costs. Sales of 24 owned communities generated $178.6 million after transaction costs in 2026 to date, and Brookdale plans to sell five more communities during 2026.

Cash, marketable securities and available credit totaled $523.6 million on September 30, down $42.3 million from June 30. Quarterly adjusted free cash flow fell 39.6% to $13.158 million, even as adjusted EBITDA increased.

The fourth-quarter purchase would move another 30 communities from leased to owned, with the expected rent savings beginning in 2027.

Sources

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