Aging as an Investment Theme
As the population is aging, so are the requirements for more medical treatments. This can be a winning long-term theme for investors, as the aging of the baby boomer generation—born between 1946 and 1964—is a predictable demographic trend, with the youngest turning 65 by 2029.
However, investing in medical care can be complex and requires picking the right companies or sub-sectors. For example, we cover such options in “5 Best Healthcare ETFs to Invest In”, “Top 5 AI & Digital Biotech Companies” or “Top 5 Blue Chip Pharmaceutical Companies” among many other articles related to this topic.
Another option is to bet on the demand for medical facilities. Hospitals, retirement homes, care centers, and other related real estate assets are going to be in constant demand as long as the population is aging.
A good way for investors to get access to this trend is through healthcare REITs (Real Estate Investment Trusts). REITS are publicly traded stocks of companies managing thousands or even tens of thousands of real estate assets. In the U.S., REITs are mandated by law to distribute at least 90% of their taxable income as dividends to shareholders. So, they are also a good option for building an income-focused portfolio.
In the case of healthcare REITs, the value of the assets and the revenues they generate will likely be quite uncorrelated from the broader real estate market, and more centered on the demand for healthcare and old-age-related facilities.
Population Aging
The past few years have seen the population aging, but this was nothing compared to what is yet to come. When it comes to healthcare REITs, the most relevant population is the 80-year-old and older categories, as these are the ones most likely to need medical assistance, senior housing, and specialized care.
Between 2007 and 2024, this category only increased moderately. This will explode from now on, with a growth of 28% expected by 2030.
Source: Ventas
In raw numbers, this means that an additional half a million Americans will reach age 80 between 2024 and 2026, and another 876,000 between 2027 and 2030. Additionally, 20% of the population will be 65 years old or older. This could push the number of Americans with at least one chronic condition from 130 million to 180 million by 2030.
Source: Ventas
On average, senior housing is not as fluctuating as other forms of housing, due to much more stable income and housing needs of older demographics. For example, senior housing occupancy only dipped by a few percent (2-4%) during the 2009 Great Financial Crisis.
Source: Well Tower
So overall, the positive long-term trend and stability of the sector, combined with the regular income distribution mandated by regulations, make healthcare REITs a good option for defensive and income-focused portfolios.
Top 5 Healthcare REITs
1. Welltower Inc.
Welltower real estate consists of healthcare facilities, like medical offices, senior housing, and rehabilitation centers (medical care outside hospitals). Welltower manages 1,400 properties in the US, Canada, and the UK.
It is also by far the largest healthcare REIT in the market, with a market capitalization often 3x larger than the next largest one.
Welltower Inc. (WELL +0.26%)
The way Welltower reached such size is largely through acquisitions, combined with project development. For example, it purchased no less than $6B in assets in 2024, at over 30% below replacement cost, based on company assessments. In 2025, the acquisitions of 38 ultra-luxury Amica Senior Lifestyles’ portfolio of senior housing communities for C$4.6 billion.
Source: Welltower
The company success is also established on building an ultra-long term approach, with a narrow focus on the core competence of senior housing and senior-centric healthcare facilities.
Every capital allocation decision we make is viewed through an “opportunity cost” prism. Doing so compels us to consider all implications of those decisions, well into the future – what it will cost us if not done right or not done at all.
In our process, we often pivot to Warren Buffet’s three questions to assess opportunity cost: “And then what, compared to what, at the expense of what.”
The massive portfolio of the company plays in its favor, as senior housing construction costs have risen significantly and may rise further given potential tariff implementation. This has led to a steep decline in new unit construction, which will impact the market value of the existing one for several years.
Source: Welltower
From a financial point of view, Welltower is also well protected against potential financial disruption and rising interest rates, as more than 90% of the company’s debt is at fixed rates.
Source: Welltower
So investors willing to enter the sector and looking for the maximum safety and scale are likely to prefer Welltower for the maximum diversification and portfolio size offered by any single company.
2. Ventas
Ventas, Inc. (VTR +0.59%)
Ventas is another major actor in the senior real estate sector, with 1,400 properties, of which >800 are senior housing properties.
Source: Ventas
This prevalence of senior properties is a growing trend in the company’s portfolio, with a significant increase since 2021 (SHOP stands for Seniors Housing Operating Portfolio).
Source: Ventas
In 2025, the company expects to see its occupancy rate rise back to pre-COVID levels and then surpass them. Revenues are also growing at a good pace of 8%, above the 5% rise in costs.
One of Ventas’ competitive advantages is a very data-driven approach in order to identify the most promising markets. It also performs regular modernization of the facilities, allowing for premium pricing on older properties.
Another method adopted by Ventas to create senior housing at a reasonable cost is to transform large-scale communities to senior housing, with 45 such conversions ongoing in 2025.
In the wider picture, Ventas is looking at the consolidation of the senior housing market, as currently only 16% of the market is controlled by Ventas, other similar REITs, and publicly traded owner-operators of healthcare real estate.
Source: Ventas
This could be an important opportunity as at least some of the properties in the market are likely to be distressed due to poor management, especially as rising rates have endangered poorly capitalized companies and as no less than $24B of senior housing loans are reaching maturity through 2027.
Source: Ventas
3. Healthpeak Properties
Healthpeak Properties, Inc. (DOC +0.2%)
While the largest healthcare REITs tend to have a strong presence in senior housing, as this is by far the largest part of the market, smaller REITs can have a larger proportion of their portfolio in care centers.
It is the case of Healthpeak, with no less than 524 properties in its medical portfolio, including large hospitals.
Source: Healthpeak
This is an attractive sector as construction costs have risen ~40% since 2020, limiting new supply. The required rent to cover construction costs of new units is ~$35 – $40 PSF vs. Healthpeak’s in-place net rent of ~$23 PSF.
This provides space for Healthpeak to push for high rent upon lease expiration, and increases the retention of current tenants until then. The average remaining lease is 5.5 years.
Source: Healthpeak
The company is also present in the laboratory segment, servicing the biotech sector with a strong presence in San Francisco, Boston, and San Diego.
So it should benefit from a growing amount of money flowing into the sector, after several years of low activity, a trend already visible with 1 million square feet of new lease in 2024.
Source: Healthpeak
This rebound is also quickly impacting the inventory of vacant laboratory space, with a 75% increase between 2024 and 2025.
Source: Healthpeak
Meanwhile, the less central but profitable 15-property portfolio of senior housing (7,000 units) is performing well, with rising occupancy reaching 86% in 2024. This makes Healthpeak a good REIT for investors looking for more diversification, away from a senior housing portfolio.
4. Healthcare Realty
Healthcare Realty Trust Incorporated (HR -0.1%)
If a strong focus on medical facilities is what an investor is looking for in a healthcare REIT, then the best choice is probably Healthcare Realty, with 92% of the portfolio focused on outpatient medical care, way ahead of its competitors.
Source: Healthcare Realty
The company owns 651 properties across the USA, for a total of 38.4 million square feet of surface. This presence covers most of the country’s top 15 markets and partners with many of its top health systems.
Source: Healthcare Realty
These properties are also situated in a high-density population area, experiencing an annual growth rate of 3%. The company is shifting its focus to these markets, with the sale of underperforming assets in regions with lower population density and slower growth.
This REIT too should benefit from aging demographics, as 65+ year olds are spending twice more per year in physicians’ offices and healthcare costs than 45-64 year olds.
Source: Healthcare Realty
This is overall a good REIT for conservative investors looking for relatively high yields with high safety, as outpatient care, both specialty and primary care have by far the highest rent coverage ratio in the entire healthcare industry, allowing for very low default risk from these tenants.
Source: Healthcare Realty
5. LTC Properties
LTC Properties, Inc. (LTC +0.96%)
On the opposite end of the spectrum of housing vs outpatient care, some healthcare REITs specialize in skilled nursing properties and senior housing. This is the case of LTC Properties, with properties split approximately 50/50 between the two categories.
Source: LTC Properties
The company owns a total of 190 properties across 25 states. It then rents these properties to various healthcare providers, with none representing more than 15.9% of total revenues, reducing the risk of a single tenant having financial difficulties.
Source: LTC Properties
Regarding growth, $731M has been invested since 2019, with not much activity in 2024, at only $66M invested for the whole year.
Source: LTC Properties
LTC is a good REIT option for investors seeking a steady income, as the company has maintained a consecutive 20-year record of monthly dividends, uninterrupted by the various financial crises and the pandemic during this period.
This was achieved through a conservative approach to debt and organizing debt maturities to match the company’s cash flow.
Source: LTC Properties
However, investors should be aware that the dividends have not been increased for a long time (since 2017), as the company focuses on growth. This is more suitable for a conservative portfolio focused on monthly dividends, such as for a retired investor.
Source: LTC Properties