Brookdale Senior Living Navigates Turbulence Amid Transformation With ‘selling Season’ Ahead

Brookdale Senior Living (NYSE: BKD) has over the last year continued its ongoing “transformation” into a leaner, more agile senior living operator. While those changes were “critical” to Brookdale’s future, they caused some temporary operational disruptions.

That’s according to Brookdale CEO Nick Stengle, who took the reins at the nation’s largest operator about seven months ago. Thanks to a push toward ownership, the Brentwood, Tennessee-based operator is the third-largest owner of senior living real estate in 2026.

As part of the transformation, Brookdale has exited much of its third-party management business, and since the start of last year, the company has transitioned out of over 100 communities.

The company also has implemented a new regional leadership structure and redefined reporting relationships between staff across all levels of the company, creating six geographic regions led by a regional vice president of operations and a dedicated regional leadership team “with all the key functions” of an operating company, Stengle said during the operator’s first-quarter 2026 earnings call Thursday. Those moves are vitally important to prepare Brookdale for the future of senior living operations, and in doing so, Brookdale corporate management, namely its new CEO, has “reset” its line of communication to the communities it operates.

“We’re on a transformative path here, and some of this predates me, so this started a year ago, but even in the last seven months … we have undergone many, many changes,” Stengle said.

Also aiding the transformation was the hiring of Mary Sue Patchett as the company’s new COO, its first time filling the role in more than a decade. Brookdale also hired a senior vice president of strategic operations to oversee pricing, labor management and capital deployment.

These changes will help operations, sales and clinical teams share information with the company’s COO to create a clear connection between department heads and corporate executives, Stengle said.

But as necessary as those changes were, they led to some turbulence in 2025 and into the first quarter of 2026, Stengle said. Brookdale narrowed its net loss to $7 million in the first quarter of 2026, a reduction compared to its net loss of $65 million in the same period in 2025.

Even so, early signs of occupancy gains in April are giving the company’s leaders confidence that the transformation is bearing fruit despite a few short-term challenges.

Brookdale stock fell $0.61, a decrease of 4.34%, to rest at $13.56 at market close on Thursday.

First-quarter disruptions after year of change, but stronger year ahead

In the first quarter, Brookdale faced disruptive winter storms at many communities, combined with new rate increases, that decreased the number of “controllable move-outs,” Stengle said. That led to a 40-basis-point decline in average occupancy between the fourth quarter of 2025 and the first quarter of 2026. Weighted average occupancy for Brookdale in the first quarter of 2026 was 82.1%, a decrease from 82.5% in the fourth quarter of last year.

To shake off the dip in occupancy, Stengle reminded investors the industry is entering its “key selling season” between May and September, and he pointed to April data as a sign of improved performance ahead for Brookdale, though he cautioned he is also not “doing victory laps” just yet.

“It is a very strong data point, in our April occupancy growing 30 basis points, when historically, it’s been close to a flat, maybe 10 to 20 basis points,” he said during the call. “To have that happen at the early stages of the selling season … is reflective of our confidence and of all the change that we’ve made.”

The 2026 winter storms caused higher utility and food service bills, along with unscheduled building maintenance repairs. Total direct additional costs from storm damage were approximately $3 million to $4 million, Stengle said.

Combined with the new organizational structure, Brookdale also took steps to change its enterprise resource planning (ERP) system to centralize workforce management, finance and human resources functions.

Brookdale’s total third-party management portfolio peaked in size in 2017 with 229 managed senior living communities and is at seven communities in May 2026, with plans to reduce the number further, Stengle noted.

The company also reported its lowest rate of turnover since March 2020, Stengle said, a sign that workforce initiatives are starting to pay off.

“These improved metrics are indicative of the success of our recent organizational changes and the cultural transformation we have undertaken,” Stengle said. “Taken together, they are leading indicators of the accelerating improvement in resident satisfaction, occupancy and operating margin that we expect over the remainder of the year.”

How Brookdale will approach growth in 2026

Stengle said Brookdale would pursue “very small, deliberate” acquisitions of one to three communities at a time, but will not expand the company’s presence to a new state.

Today, Brookdale operates in 42 states nationwide, with “no desire” to enter a new market, Stengle said.

“Our strategy is to be in markets we already are in,” Stengle said. “We do not feel, based on the pipeline that we’re looking at and currently contemplating, that we’re competing against larger REITs, because we’re deploying different acquisition strategies based on our needs and based on their needs.”

With a majority of these staffing and portfolio changes “mostly behind us,” Stengle said Brookdale is in a position to “really lean in” to the company’s identity as a senior living operator. With April’s strong occupancy and revenue data, Stengle said the changes are “reflective of our confidence” in making the necessary organizational changes.

While move-outs in the first quarter were due to a higher in-place rate increase in January, in the range of “high single digits,” Stengle said the “stickiness” of those rate increases gives the company confidence in pricing power going forward.

To improve communities, Brookdale is projecting to spend between $175 million and $195 million on capital expenditures (CapEx) projects. For example, Brookdale noted renovation projects at communities in North Carolina, Oregon and Washington that helped improve occupancy and revenue, with project costs spanning $1.6 million to $2.7 million, according to the company’s investor presentation issued Thursday.

Brookdale also has a “pipeline” of future capital improvement projects, and a new senior vice president of strategic operations will oversee projects that are “large, deliberate, comprehensive investments” to improve communities, Stengle said.

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