COVID 19 AND THE OPERATING EFFICIENCY OF HEALTHCARE REAL ESTATE INVESTMENT TRUSTS

Rashmi Malhotra
Saint Joseph’s University

D.K. Malhotra
Thomas Jefferson University

ABSTRACT

Healthcare specialty real estate investment trusts (REITs) enable an investor to focus on
a certain industry’s high total return, income, and diversity. COVID-19 has a number of distinct,
and at times contradictory, implications for the healthcare business. Although extensive study has
been done on the success of REITs and other specialty mutual funds, there has been less research
on the relative performance of healthcare REITs and how COVID 19 influences their performance
in contrast to past years. This research looks at the performance of healthcare REITs from 2016
through 2020. In addition, we evaluate a REIT’s performance against those of its competitors, as
well as its own previous performance. Based on earnings before interest, taxes, depreciation, and
amortization (EBITDA), return on investment, interest coverage ratio, cash flow per share, and
efficiency in utilization of its capital, only three out of twelve healthcare REITs have consistently
performed better relative to their peers throughout the sample period of 2016 to 2020.

Keywords: Healthcare real estate, COVID-19, data envelopment analysis, benchmarking, financial ratios