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Healthcare REIT Investments Should Accelerate

CLEVELAND—According to the latest report from RBC Capital Markets, 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.

By Natalie Dolce | nataliedolce | Updated on August 16, 2016

investmentCLEVELAND—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.”

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