The decrease in seniors moving into elderly homes because of the novel coronavirus could result in higher leverage expectations over the next 12 to 24 months and rating downgrades in the REIT sector, according to Fitch Ratings.
REITs with senior housing portfolios may experience monthly occupancy declines in the 200 basis point to 400 basis point range. That number is higher than the 300 basis points that Fitch initially anticipated from declines.
"The development of a vaccine or a highly effective therapy may be the inflection point that sets the stage for a meaningful recovery, given an aging demographic and likelihood of slower growth in industry supply," the ratings agency said in its report.
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Dan Clark
Dan covers cyber security, legal operations and intellectual property for Corporate Counsel. Follow him on Twitter @Danclarkalm.
