Activist investor Ortelius Advisors continues to put pressure on Brookdale ahead of its annual shareholder meeting, while the nation’s largest operator continues to tout its operating results as proof it’s on the right path in 2025.
Activist investor Ortelius on Tuesday issued an open letter to Brookdale shareholders noting it remains “deeply concerned” by Brookdale’s alleged “underperformance and undervaluation” after “years of missteps and shortcomings.”
Ortelius continues to seek the installment of six candidates to serve on Brookdale’s board of directors, an entity which Ortelius said has “spearheaded the vast destruction of shareholder value” over the years.
The latest correspondence by Ortelius calls for new board members, while asking to monetize underperforming assets and focus on high-performing communities. The investor also pushed Brookdale to pay down debt to eliminate loss on its balance sheet. The effort hinges on a strategy to unlock real estate value and optimize Brookdale’s capital structure, according to Ortelius.
“After years of missteps, shortcomings, underperformance, and chronic undervaluation, stockholders have lost confidence in Brookdale’s leadership, judgment, execution and decision-making abilities,” Ortelius Advisors Managing Member Peter DeSorcy wrote in the letter. “The board’s failure is palpable, and its recent steps smack of self-preserving and defense-oriented tactics in the face of a director election contest.”
The latest letter comes after a back-and-forth between Ortelius and Brookdale, aiming to win over shareholders ahead of the board vote at the company’s annual shareholders meeting, set for July 11, according to Brookdale’s website.
Former CEO Cindy Baier resigned from her post on April 13th, and was awarded $11.7 million for termination without cause, Ortelius claims. Between February 2018 and March 2025, Brookdale’s stock price fell 37% and in that time, Brookdale paid Baier $45.4 million.
On May 15th, Brookdale filed a definitive proxy statement and mailed a letter to shareholders while outlining alleged “poor record of engagement” by Pangaea Ventures LP, a fund managed by Ortelius.
In February 2018, the Brookdale board at the time rejected a conditional indication of interest to acquire the senior living industry’s largest senior housing operator for $9 per share in cash. Since that time, Brookdale’s stock price has remained below $9 for “most” of the seven years since then, the Ortelius open letter states.
The open letter filed by Ortelius goes on to allege the company’s results have been “abysmal” while also noting performance of publicly traded real estate investment trusts Welltower (NYSE: WELL) outperforming Brookdale by 266% since 2018 and Ventas (NYSE: VTR) outperforming the Brentwood, Tennessee-based operator by 93%.
Ortelius also outlines how Brookdale’s poor financial performance has led to a decline in cash flow of $304 million between 2011 and 2017 to -$660 million between 2018 and 2024.
Coinciding with the latest announcement, Ortelius announced the launch of a website promoting its proxy fight and its proposed path forward for the company.
Brookdale leaders outline near-term upside at RBC
Although they didn’t mention the letter from Ortelius, Brookdale leadership touted the company’s recent operational results to indicate the company’s recent progress.
During the panel Tuesday morning at the RBC Capital Markets Global Healthcare Conference, Executive Vice President and CFO Dawn Kussow and Investor Relations Vice President Jessica Hazel touted various efforts made by Brookdale to improve operating performance. Both touted progress made in near-term occupancy gains and the company’s path forward on lease agreements.
Kussow said the company’s board will seek out a new CEO candidate to replace current interim leader Denise Warren who has “proven experience” and skill to “push operational improvements quickly,” along with an executive with a “strategic vision that can kind of take the company to the next level.”
During the panel, Kussow detailed Brookdale’s decision to not renew a lease with Ventas for 55 properties by the end of this year, noting the properties were underperforming compared to the company’s consolidated portfolio and with performance metrics below the company’s overall benchmarks.
Brookdale will also exit 14 non-core assets by the end of this year while weighing acquisition and dispositions in the future.
“Over the last several years, we’ve simplified the business, we’ve streamlined the business, we’ve rationalized the leased portfolio and we’ve taken care of the balance sheet,” Kussow said. “We proactively refinanced our debt so that we’re really in a great position again.”
The leaders touted Brookdale’s 80% same-store occupancy and the company’s continued rollout of its HealthPlus and EngagementPlus programs to improve resident care and lifestyle engagement.
“The 80% occupancy marker is a big marker for us, because we said at the low 80% occupancy is kind of where we’re covering our fixed costs. We have a high fixed cost business,” Kussow said.
This year, HealthPlus will be rolled out to 58 communities, having been implemented in 80 communities last summer, with HealthPlus communities reporting better year-over-year occupancy growth compared to non-HealthPlus properties.
Staffing is also improved at Brookdale communities with HealthPlus rolled out, the leaders stated, noting a lower rate of staff turnover of 20 percentage points compared to non-HealthPlus communities.
“Our strategy is specific to demonstrating that we are able to help support the clinical challenges, the loneliness challenges that the aging population is facing and we can help the residents with that and we can help their families with that, and that’s through programs like HealthPlus, like EngagementPlus,” Hazel said.
Also in the last year, Brookdale made shifts to a more internal approach on sales and marketing, pivoting away from third-party referral services as a way to directly improve occupancy and generate leads consistently.
“We’re looking at that marketing spend, and whether it is direct mail marketing, marketing through our call center, upgrades on our website,” Kussow said. “So it’s making sure that is putting our best foot forward in making sure we can exhibit the quality care and quality product we have.”
