Labor pains worsened by pandemic conditions could threaten positive strides made in occupancy by skilled nursing operators under the Sabra Health Care REIT umbrella, warned the company’s top executive Thursday.
“Labor challenges … that’s really the biggest challenge right now,” said Rick Matros, Sabra’s chairman and CEO, during a second-quarter earnings call.
The California-based real estate investment trust reported average occupancy for its skilled nursing/transitional care portfolio has steadily increased since December. Its top eight operators, which comprise 71% of the REIT’s skilled nursing rent, saw average occupancy rise 601 basis points since then.
Sabra also reported the skilled mix census in its skilled nursing/transitional care portfolio is 144 basis points higher than pre-pandemic levels from February 2020. But the lack of workers has the potential to threaten those improvements, Matros said.
“Until the pandemic-related benefits run off in September, and you nearly see this in all sectors, people just aren’t coming back to work,” he explained.
“That puts stress on operators in areas that we haven’t seen stressed before. Nursing and therapy are one thing because there’s always a shortage there but we’re [also] seeing labor stress in departments like dietary, housekeeping and laundry,” he added.
Matros said the company expects the labor challenges to improve around the fourth quarter, but things are going to remain tough until then. He also said that the labor challenge “does have some impact potentially on the trajectory and the rate of recovery for occupancy.”
“Depending on what your staffing levels are at any particular time, you may not be able to accommodate every admit,” he noted, adding that that isn’t currently the case with any Sabra properties.
