Fitch alters Welltower view to negative

Fitch Ratings said it revised Welltower Inc.’s rating outlook to negative from stable and affirmed the ratings at BBB+.

“As a healthcare REIT with a portfolio that includes senior housing facilities at 62% of net operating income (NOI), as of March 31, 2020, and skilled nursing facilities at approximately 15%, when including ProMedica, Fitch expects operating EBITDA and leverage will be negatively affected by the coronavirus,” the agency said in a press release.

“The negative outlook reflects Fitch’s view that the forthcoming erosion in NOI for the senior housing operating portfolio and reductions in cash rent in the triple net portfolio will be so significant that growth in the medical office building segment and reductions in net debt via asset sales will be insufficient to maintain leverage between 5x-6x,” Fitch said.

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