In a recently released monitoring report of median ratios and a related press release, credit ratings agency and researcher Fitch indicates the “building blocks to emerging recovery” in the life plan community (LPC) sector are anticipated for the close of FY 2024.

The report summary and press release cite three factors that are lessening the external market pressures on not-for-profit LPCs in support of this brighter outlook: 1) improved and stabilized occupancy, including in new projects that were in “fill up”; 2) the abatement of inflationary pressures that allowed recovery in operational costs; and 3) an improved national real estate market that enables prospective residents to have the necessary resources to pay entrance fees. That said, Fitch still remarked that LPCs with disproportionately high skilled nursing facility (SNF) to independent living (IL) ratios experienced ratings downgrades because of their higher risk exposure to wage pressures, government regulation, and a limited ability to reduce the number of SNF beds in their purview.

Get details and register for a September 20, 2024 Fitch-hosted report discussion here.