Health care REITs own and manage a variety of health care related real estate and collect rent from tenants. Health care REITs’ property types include senior living communities, hospitals, medical office buildings, and skilled nursing facilities. The aging of the U.S. population is expected to provide strong demand tailwinds for health care properties.
The U.S. Census Bureau projects that one in five residents will be age 65 or older by 2030; the same age cohort included 1 in 6 residents in 2020. By 2034, people with an age of 65 years and older are estimated to outnumber those under the age of 18. This marks the first time in U.S. history that older individuals are expected to outnumber children.
Health care is a “modern economy” sector. It is the sixth largest of 13 sectors in the FTSE Nareit All Equity REIT Index. Health care REITs accounted for 8.0% of equity market capitalization as of August 31, 2023. Health care has captured a larger share of the index than office; its stake stood at 4.5%.
