For the second year in a row, Fitch has evaluated the not-for-profit Life Plan Community sector’s 2024 outlook as “deteriorating.”  The January 8 Fitch Report cites the known and redundant causes, termed “strong headwinds,” as the reason the year ahead does not have a more positive outlook. These include: continued staffing and labor wage pressures, made worse by the possibility of CMS finalizing minimum staffing ratios; sluggish real estate pricing that may make it more difficult for new residents to pay entrance and monthly fees for IL; and operating cost pressures from inflation that LPCs may not be able to continually pass on to residents in the form of raised monthly fees or mid-year assessments. Redeeming and hopeful trends in the sector, however, were highlighted as well, including strong consumer demand, stabilized and rising occupancy, overall stability in individual LPC’s Fitch credit ratings since last year, and M & A activity that will help smaller LPCs gain the advantage of economies of scale through consolidation. Much of the activity that would return the LPC sector to a “neutral” outlook remains out of LPCs’ collective control; labor availability and costs would have to dramatically improve, along with real estate pricing and LPCs’ ability to mitigate inflationary trends through cost savings or increased resident fees. Other, not-dissimilar sectors that also had a “deteriorating outlook” for this year included not-for-profit hospitals and U.S. higher education systems.