The median rating for nonprofit life plan communities remains at ‘BBB,’ according to a report Tuesday from Fitch Ratings. This latest report, however, only captures the first quarter of the year, the ratings agency noted.
Fitch included a total of 156 life plan communities in its analysis. The number of ratings in the ‘BBB’ rating category remained the most numerous at 76, or about 49% of total communities, compared with 37, or 24%, in the ‘A’ rating category. Within Fitch’s median portfolio, Type A contract providers remain the most common, at 62, or about 40% of the portfolio. Type C contract providers, and Type B contract providers accounted for the rest.
“The sector is trying to regain a place of stability — a new normal, which for at least the remainder of 2020, will include the impact of the coronavirus,” said Margaret Johnson, Fitch’s director of senior living. “The pandemic has resulted in increased expenses and lower revenues as a result of a decline in post-acute rehabilitation volumes and pressured cash flows. However, none of this impact is captured in this set of medians, as the impact from the coronavirus is only first seen in the first quarter.”
The pandemic’s full effects won’t truly be captured until next year’s median report, she added.