A new report from BTIG shows that health care REITS are down nearly 26% year-to-date as opposed to the wider REITS sector, which is down about 14%.
The report states that health care “remains a sector of change.”
“The acute phase of the COVID-19 pandemic has led to different levels of operating stress across the healthcare system,” the report states…. “Potential disparities in outcomes based on insurance coverage during the pandemic could also lead increased calls for changes to government healthcare programs.”
The same report does show that medical office building REITs have held up pretty well and have been “relatively resilient.”
The report says that since April during the midst of the coronavirus pandemic, “outpatient volumes have risen to 69% of pre-COVID levels… Accordingly, our MOB (medical office building) coverage has collected 95% of second quarter rent on average, stability which is reflected in unchanging MOB dividends.”
As it pertains to senior housing trends, BTIG says senior housing facilities and their residents are taking the advice of health experts.
The numbers of seniors in such facilities who have contracted the virus has declined, BTIG says.
“Specifically, for SNR, less than 0.2% of residents and employees are positive for the virus, and the new case rate has declined 91% from peak levels in April,” the report says. “Thus, 90% of SNR properties have begun lifting restriction using a phased approach so that residents can return toward normality and new residents can begin moving in.”
The report concludes: “We expect this same-store operational and occupancy focus to remain at the forefront until REITs’ cost of capital improves enough to return to the acquisition market.”