Healthcare REITs: A Boom Is Coming
The story behind healthcare real estate investment trusts (REITs) has long been that they will benefit from the giant baby boomer generation as it crests into retirement. After all, healthcare needs materially increase for people age 65 and older and real estate that accommodates those needs will be in higher demand.
So far, however, the math hasn't worked out so well for senior housing, because construction has outstripped demand. But REIT industry giant Ventas (NYSE: VTR) thinks the trend is going to turn in a positive direction very soon.
At Ventas' investor day, the company spent some time discussing its market research approach. This was important because Ventas is making a bold call. After several years of performance decline due to portfolio repositioning, It believes that 2020 will be the year in which its funds from operations (FFO) start to "pivot" back to growth, with 2021 being the key year. That's when Ventas says demand for senior housing will outstrip supply following years of over-construction in anticipation of the baby boom retirement wave. That, in turn, will push the company's FFO higher.
Source Fool.com
