Fitch: CCRC sector expected to remain stable in 2007

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The continuing care retirement community market is expected to remain on stable footing throughout the rest of the year, according to credit analysts from Fitch Ratings.

Strong demand and management practices are two key reasons for the optimistic outlook, according to Fitch's analysis of first quarter results, which was released Thursday. Individual CCRC ratings downgrades may eventually outnumber upgrades by the end of the year, but that would largely be due to a softening housing market, analysts said.

"Positives" for the CCRC market include solid cash flow, sound liquidity levels and low interest rates. However, climbing debt in the sector - aimed at funding expansion and upgrades - may put additional pressures on operations, Fitch said. Future CCRC residents will demand more services, bigger units and nicer amenities, analysts pointed out.