Healthcare REIT Update – 1st Quarter 2024

June 12, 2024

Since the inception of Healthcare Real Estate Investment Trusts (REITs) in the early 1970s, the sector has seen substantial growth, evolving far beyond its initial focus on basic healthcare facilities. In many ways, the rise and success of these REITs has been tied to healthcare spending which totaled $74.1 billion, or 6.9 percent of US GDP, in 1970 to $4.5 trillion, or 17.3 percent of US GDP, as of 2022. Today, “healthcare” encompasses a diverse array of properties, including continuing care retirement communities, outpatient medical offices, hospitals, and research and lab facilities. Many properties across all of these categories are owned by public healthcare REITs that often partner with large private equity firms and institutional investors looking to diversify their real estate holdings with an alternative asset type. As an investment, these properties will see an outsized benefit from the aging baby boomer population and generally offer investors stable growth which is not directly correlated with the broader market. By market capitalization, the largest healthcare REITs include Welltower Inc. (WELL), Ventas Inc. (VTR), Healthpeak Properties Inc. (DOC), Omega Healthcare Investors Inc. (OHI), and Healthcare Realty Trust Incorporated (HR).

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