The outlook for the not-for-profit life plan community sector remains stable for 2020, according to Fitch Ratings.
Favorable demographics, healthy real estate markets and easy capital access will aid the sector, the report notes. Large capital projects, however, may generate negative rating pressure for some communities, even if these projects serve a longer-term strategic purpose, the report adds.
The ratings service also anticipates more mergers and acquisitions in this sector, particularly among smaller operators feeling pressure to align with bigger organizations.
“Systems like Acts Retirement-Life and Covenant Living Communities and Services have either acquired other LPC campuses or merged with another LPC system in the last couple of years due to competitive and cost pressures, neither of which are likely to abate over the next few years,” said Senior Director Kevin Holloran.
Increased use of websites and social media to improve marketing efforts also is likely.
“Digital marketing can meaningfully expand the marketing reach of LPCs both demographically and geographically, especially with baby boomers and children of seniors becoming a growing target of LPC marketing efforts,” he added.
The full report is available here.