Fitch Ratings released its 2010 Senior Living Outlook that shows it is extending its negative outlook for the nation’s senior living sector. The report paints a cautious picture of the senior living finance market with risk associated with renewal of bank lines, the tenuous residential housing market and the lower liquidity experienced my many operators. The report shows the widening gap between more established retirement communities and newer start-up developments that lack an established track record.
Fitch’s Outlook talks extensively on cash flow and loan covenants, near and dear to bankers, investors and operators. Fitch paints a neutral to negative picture as it notes that it expects more ratings downgrades than upgrades and that affirmations will be the most frequent rating for the year.
The report outlines the challenges that exist in the market which include:
- Renewal Risks on Lines of Credit
- Weaker Liquidity
- Higher Capital Costs
- Real Estate Market Stress
For the full report, click here (registration required).