When senior-housing occupancy improves faster than the labor model

The initial case carries 152 average occupied units at 84.4% occupancy. Resident fees and services total $11.266 million. Direct labor is $4.400 million, contract labor is $280,000 and total property operating expense is $8.770 million. Year 1 NOI is $2.796 million.

The revised case uses the current resident census, assessment, service plan, billed care level and move-in date for each occupied unit. It then maps the resulting coverage requirements to the staffing grid, open positions, timecards and agency invoices.

Average occupancy increases to 88.3% and resident fees and services increase by $847,000. The higher-acuity mix requires more evening, overnight and two-person coverage than the initial staffing case. Year 1 NOI falls to $2.364 million.

The seven-unit occupancy gain contains a substantial mix change. Independent living falls from 52 to 48 occupied units. Low-support assisted living falls from 30 to 24. High-support assisted living rises from 14 to 22, and high-support memory care doubles from eight to sixteen.

Each resident is assigned the housing and care fee in the current agreement, assessment and notice file. The model does not apply a portfolio RevPOR increase to every occupied unit. A resident can require a higher support level before the related fee becomes billable, and a new move-in can receive a temporary housing concession while paying full care charges.

On that basis, resident fees and services are $12.113 million. The amount is $847,000 above the initial case, but it is attached to a materially different coverage requirement. The revenue file therefore determines which service plans must enter the staffing schedule.

The staffing case is rebuilt by shift and care setting. Direct-care hours rise from 2.25 to 2.71 per occupied resident day. The schedule requires 72 care FTEs rather than 63 after adding evening and overnight coverage for the revised assisted-living and memory-care mix.

The payroll roster has twelve open care positions. Existing staff cover part of the gap through overtime; agency shifts increase from 14 to 41 per week. Direct labor rises by $650,000 and contract labor rises by $440,000 on the observed wage and invoice rates.

Those costs do not disappear because the annual plan contains a recruiting assumption. The base case phases a direct hire into the roster when the position is actually filled and removes the corresponding agency shift on the same date. Until then, the forecast carries the staffed coverage used to operate the current resident mix.

Total property revenue increases from $11.566 million to $12.383 million. Community fees and other revenue fall by $30,000 because the revised move-in schedule contains more waived community fees, while the housing and care lines follow the resident-level schedule.

Direct and contract labor account for $1.090 million of the expense increase. Food rises by $120,000 with occupied resident days and service mix. The management fee increases by $41,000 on the larger revenue base. Other property expenses remain effectively unchanged.

Property operating expense reaches $10.019 million. NOI falls from $2.796 million to $2.364 million and the margin falls from 24.2% to 19.1%. The revised margin is a consequence of the current resident and labor files, not a margin assumption applied after the revenue forecast.

At the $36 million purchase price, the initial NOI produces a 7.77% going-in yield. The $21.6 million loan is constrained by 60% LTV and opens at a 12.94% debt yield, above the 12.5% minimum.

The resident-level NOI produces a 6.57% yield. At 60% LTV, debt yield falls to 10.94%. The debt-yield constraint sizes proceeds at $18.912 million, $2.688 million below the initial case. Required purchase-price equity increases from $14.400 million to $17.088 million.

The direct-hire case fills nine open positions over six months and removes the corresponding agency schedule, restoring $420,000 of NOI. The current-care-pricing case bills completed assessments after the applicable notice periods. The agency downside leaves the open positions in place and carries the higher coverage cost through the forecast year.

Cap Orbit can work across the daily census, resident agreements, fee schedules, assessments, service plans, change notices, staffing grid, employee roster, open positions, timecards, agency invoices, food-service records, management agreement, debt quote and existing acquisition model in the same deal. Each occupied unit can be tied to its current fees and required coverage.

From there, you can have Cap Orbit rebuild resident fees by effective date, identify service-plan changes that have not reached billing, translate the resident mix into a shift-level staffing schedule and update direct labor, overtime, agency, food, management fees, NOI, debt and equity in the existing model.

The same deal record supports the operating cases that matter here: fill open positions on a specific schedule, change agency coverage as hires arrive, bill assessed care after notice or carry vacancies in selected care settings. Each case returns the same connected outputs—resident mix, billed fees, staffed hours, labor cost, NOI, debt and equity.

The standard for AI on this asset class is a resident-level operating case in which occupancy, care revenue and staffed coverage resolve into the same Year 1 NOI and capital requirement.