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Health care REITs post strong gains as baby boomers drive demand
The sector held 19% of the FTSE Nareit All Equity Index by market capitalization, and it reported higher occupancy in senior housing alongside rising FFO and NOI.
Health care REITs have been delivering outsized performance in recent periods, with the sector now the largest in the FTSE Nareit All Equity Index, at 19% of market capitalization and more than $300 billion, according to Nareit.
Nareit attributed the strength largely to demographic trends, noting that the youngest baby boomers have turned 60 and are increasing senior housing demand. It cited an occupancy increase for senior housing to 89.9% in the second quarter of 2026, up 1.8 percentage points year over year, and said senior housing operating portfolios represent more than half of health care REITs’ asset value.
The outlet also pointed to balance sheet positioning and operational momentum. Nareit said that as of the second quarter of 2026, 86% of health care REIT debt was unsecured, 85% was fixed rate, the weighted average interest rate on total debt was 4.5%, and the weighted average term to maturity was 6.6 years.
Operational metrics strengthened too: Nareit reported funds from operations up 26.3% year over year and net operating income up 15.2%, with health care same-store NOI rising 6.6%, the largest gain among property sectors. For 2025, it said health care delivered the top total return among property sectors at 28.5%, and through the end of August 2026 it showed a double-digit gain of 23.1%.
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