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Health care REITs set for strong senior housing growth, says Raymond James
Raymond James expects senior housing demand to support roughly 10% annual growth over the next decade, with occupancy around 90% nationwide today.
Raymond James Equity Research analyst Dave Rodgers says health care REITs have strong long-term demand tailwinds, with senior housing standing out as a particularly attractive area within the sector, according to the REIT Report podcast.
Rodgers pointed to a large older population and limited supply as key drivers, saying those conditions could provide a runway for strong organic growth. He also cited senior housing occupancy nationwide of around 90% and argued that rent growth and margin expansion can support continued momentum.
He added that prospective residents are placing more emphasis on the lifestyle component, while improved technology is enhancing the resident experience and reducing labor intensity in operations. Over the next decade, Rodgers said it is reasonable to expect the business can grow at about 10% annually.
Rodgers also said Raymond James is constructive on skilled nursing and outpatient medical, noting improved occupancy and more institutionalized operators in skilled nursing are supporting coverage levels for REITs that own those assets. Nareit also describes REITs as companies that own or finance income-producing real estate across property sectors.