Health care is an essential part of our daily lives, a significant portion of the overall economy, and a major sector of the REIT market. Health care accounts for nearly one-fifth of the U.S. economy, and continues to grow more rapidly than other sectors.
REITs own and operate a diverse set of properties that provide services across the health care spectrum, including senior housing, medical office buildings, skilled nursing facilities, lab space and hospitals. These properties are geographically diversified, with facilities in nearly every major city in the country. The health care sector is often considered to be robust across the business cycle and less vulnerable to downturns, as people need health care in every business environment.
As the Baby Boom generation ages, demand for all types of medical services is expected to grow. Senior housing is a case in point. The population aged 75 and older is increasing by 55,000 every month, twice the rate of just five years ago—and half the rate expected in coming years.
Senior housing has become an increasingly popular choice of living arrangements for older Americans, especially as “active adult” communities attract younger senior residents. Many senior housing facilities offer a continuum of care, from independent living to assisted living to skilled nursing and memory care. Demand is likely to grow faster in the years ahead as Baby Boomers age.
