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Health care REITs, especially senior housing, see strong demand outlook
Raymond James projects senior housing could grow about 10% annually over the next decade, with nationwide occupancy around 90% today.
Raymond James Equity Research’s Dave Rodgers said health care REITs, particularly senior housing, have one of the most attractive demand setups in the REIT industry, supported by an aging, wealthier older population and limited supply.
He pointed to rent growth and margin expansion as signs of “strong organic growth,” adding that he does not think it is a stretch for senior housing to grow around 10% annually over the next decade.
Rodgers cited nationwide senior housing occupancy of about 90% and said more residents are attracted by the lifestyle component, while technology improvements are enhancing the resident experience and reducing labor intensity in operations.
He also said Raymond James is constructive on skilled nursing and outpatient medical, noting the outlook is tied to underlying fundamentals and shifting care preferences.