Demand for healthcare-related real estate is projected to grow in the long term, driven by growing medical needs amid the aging population and increasing prevalence of chronic diseases. But the healthcare REIT sector is very vulnerable to higher interest rates because of their long-term leases and small re-leasing spreads.
Therefore, investors could watch fundamentally sound healthcare REIT National Health Investors, Inc. (NHI – Get Rating) for a steady income and long-term capital appreciation. On the contrary, it could be wise to avoid struggling healthcare REITs Welltower Inc. (WELL – Get Rating) and Healthcare Realty Trust Incorporated (HR – Get Rating).
Real estate investment trusts (REITs) play an essential role in the healthcare industry. Healthcare REITs own, manage, acquire, and develop healthcare-related real estate while collecting rent on it. These properties comprise general and specialty hospitals, senior living communities, outpatient facilities, medical office buildings, skilled-nursing facilities, and research and laboratory spaces.
Furthermore, REITs are better-performing sectors during the inflationary period as they are positioned to benefit from increasing rental rates on existing properties. Moreover…
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