CLEVELAND—The healthcare REIT sector's 2Q16 earnings results “largely exceeded both our expectation and consensus as four out of our ten company coverage universe exceeded our expectation, four met, and only two missed.” That is according to the latest report from RBC Capital Markets.
Similarly, the company says, four companies exceeded consensus, five met, and one missed. “Going forward, we are more encouraged by the space's ability to drive significant external growth through accretive investments mainly due to the recent stock price performance along with the continued low interest rate environment.”
And while operating trends continue to appear solid, the firm notes that long-term risks still loom. “We believe the space continues to benefit from generally healthy operating trends as coverage ratios held largely steady and the same property portfolios generated modest NOI growth broadly. However, the property-level and macro issues still loom especially with regard to the senior housing and skilled nursing facility property types.”
The report continues that “REITs' senior housing operating portfolios delivered another solid quarter with the same property portfolios within our coverage universe generating a median year-over-year cash NOI growth of 4.8% up from 4.4% in the previously quarter. Additionally, we expect the SHOPs will continue to deliver healthy results at least in 2H16.”
According to RBC Capital Markets, investments should accelerate in 2H16 in part due to the pending deals by VTR and HCN. “The sector's investment activity picked up during the quarter, and is expected to accelerate in the 2H16 with several pending large portfolio transactions. The REITs were more pragmatic deploying capital at the start of the year mainly due the challenged capital markets and sector's high leverage metrics. However, over the past six plus months, the sector's stock prices have rebounded meaningfully, interest rates dropped, and leverage metrics appear much more attractive.”
CLEVELAND—The healthcare REIT sector's 2Q16 earnings results “largely exceeded both our expectation and consensus as four out of our ten company coverage universe exceeded our expectation, four met, and only two missed.” That is according to the latest report from
Similarly, the company says, four companies exceeded consensus, five met, and one missed. “Going forward, we are more encouraged by the space's ability to drive significant external growth through accretive investments mainly due to the recent stock price performance along with the continued low interest rate environment.”
And while operating trends continue to appear solid, the firm notes that long-term risks still loom. “We believe the space continues to benefit from generally healthy operating trends as coverage ratios held largely steady and the same property portfolios generated modest NOI growth broadly. However, the property-level and macro issues still loom especially with regard to the senior housing and skilled nursing facility property types.”
The report continues that “REITs' senior housing operating portfolios delivered another solid quarter with the same property portfolios within our coverage universe generating a median year-over-year cash NOI growth of 4.8% up from 4.4% in the previously quarter. Additionally, we expect the SHOPs will continue to deliver healthy results at least in 2H16.”
According to
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
