- Seniors housing REITs are capitalizing on a favorable market, buying assets below replacement cost as demand from aging populations surges and new development slows to historic lows.
- Public REITs like Welltower, Ventas, and Sabra are leading acquisitions, leveraging capital advantages over private equity in a higher interest rate environment.
- Investment strategies focus on newer vintage, high-quality assets in strong demographic markets, with REITs prioritizing operator partnerships and long-term portfolio growth.
Healthcare REITs are seizing the moment in seniors housing, as reported by Seniors Housing Business. Acquisition pipelines are swelling amid strong demographic demand and scarce new construction.The 85-plus population is expected to grow nearly 60% by 2035. Companies like Welltower, Ventas, and Sabra are accelerating investments. They are often paying far less than replacement cost for high-quality, newer vintage properties.
A Shifting Market
New development in seniors housing has plunged, with Q1 2025 construction starts at their lowest since 2009. High building costs—$300K to $400K per unit—contrast sharply with acquisition prices in the $200K to $250K range. This environment is driving REITs to buy rather than build, targeting independent living, assisted living, and memory care communities with strong market fundamentals.
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Public REITs Lead The Charge
- Welltower (NYSE: WELL) invested $6.2B in Q1 2025 alone, including a $3.35B Canadian luxury seniors housing portfolio.
- Ventas (NYSE: VTR) raised its 2025 acquisition guidance to $1.5B, focusing on high-demand US markets like Texas, where the 80-plus population is set to grow 29% in five years with minimal supply growth.
- National Health Investors (NYSE: NHI) doubled its pipeline to $331M, prioritizing below-replacement-cost buys and strategic SHOP investments.
Targeting Newer Vintage And Strategic Operators
Sabra Health Care REIT is acquiring 5- to 10-year-old properties with a path to stabilization. LTC Properties is using the RIDEA structure to align closely with operators for performance-based returns. Across the board, REITs emphasize strong operator relationships as a competitive advantage in sourcing deals.
Portfolio Repositioning
Not all REITs are in expansion mode. Diversified Healthcare Trust is selling assets to deleverage and reinvest in property upgrades, aiming to reenter the acquisition market in a stronger position.
Why It Matters
Seniors housing fundamentals are finally aligning with long-anticipated demographic trends. Occupancy is rising, supply remains tight, and demand continues to accelerate. Public REITs use their capital access and strategic focus to lead the next wave of industry growth.
