Home›Real Estate›REITs›Health care REITs see senior housing demand tailwinds

Health care REITs see senior housing demand tailwinds

Raymond James forecasts senior housing could grow about 10% annually over the next decade, citing roughly 90% nationwide occupancy and limited supply.

Reported · Written up by our desk · REITs

Raymond James Equity Research said health care REITs, especially senior housing, have strong long-term demand tailwinds as the sector benefits from an aging, wealthier population and limited supply. In a discussion on the REIT Report podcast, Dave Rodgers, managing director at Raymond James, described senior housing as one of the most attractive parts of the REIT industry, pointing to rent growth and margin expansion as drivers of organic growth.

Rodgers said he does not think it is a stretch for senior housing to grow around 10% annually over the next decade. He also cited that senior housing occupancy nationwide is around 90% today.

The analyst added that prospective residents are increasingly drawn to the lifestyle component, while technology is improving the resident experience and reducing labor intensity in day to day operations. He said Raymond James is also constructive on skilled nursing and outpatient medical, noting that more institutionalized operators and improved occupancy are supporting coverage levels for REITs that own those assets.

More like this

Sources