NorthWest Healthcare Properties REIT (TSX:NWH.UN)

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Hi,

I believee most are worried with ANY Reit now, when borrowing money is very expensive, so debts are expensive and hard to carry forward.
Is t\his company, focused on global healthcare reits any different or safer?
I read t\heir debt is 94% of assets, is that good enough?

Thanks

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Asked on December 5, 2022 9:44 pm
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Hi JJ,

Another one I own! So yes, your comments about NWH being in healthcare makes it a little bit different than the rest. Is it safer? yes and no. The company's debt load is an issue, especially in an environment of rising rates. It's always been the 'knock' against the company. Likewise the have a below average interest coverage ratio of ~1.3x.

This past quarter wasn't the greatest as we are starting to see the impacts of rising rates. Combined with one-time costs and less deals, it led to a disappointing quarter that missed expectations. That said, NOI did raise by 2.5%, thanks in large part to rents being indexed to inflation. Another positive is that 82% of its rents are tied to CPI and have average terms of 14 years.

Today, NWH is trading at a discount to NAV (much like every REIT) but seems to be trading inline with the sector. It is more defensive thanks to its exposure to global healthcare (63% hosptials/healthcare facilities & 38% medical office buildings - i'd say these are the most at risk), but I's certainly like to see that debt level come down a little. I think this one could still do well, but make no mistake, the current environment is a difficult one for them to navigate.

Mat

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Posted by Mathieu Litalien
Answered on December 7, 2022 1:40 pm