If you follow daily senior housing investment news, you may find yourself confused at times. One day occupancy is up and the next the sector is overbuilt. Senior housing has been commended as a best-buy alternative asset, while simultaneously large senior housing/healthcare REIT’s make headlines as an investment “bust.” The question investors want to know is: “Is senior housing a good investment?” The headlines, unfortunately, do not offer a definitive answer.
In this piece, I’ll discuss how to sort through the mass amounts of senior housing news available to find the information most relevant to you and your investment.
Understand the Difference Between Healthcare Real Estate and Senior Housing
First, it’s essential to understand that the bulk of news presented about senior housing investing relates to healthcare REITs, rather than investments in senior housing via private equity funds. Healthcare REITs, such as Welltower (WELL), Ventas (VTR), and Senior Housing Properties Trust (SNH), are publicly-traded companies that invest in numerous different types of healthcare real estate, including senior housing, medical office buildings, hospitals, and laboratories. For instance, despite its name, senior housing makes up about half of Senior Housing Properties Trust’s portfolio. That’s why a dip in fund performance can be so misleading for the senior housing market overall. On the other hand, certain private equity funds, such as Senior Living Fund, heavily focus their portfolios on senior housing investment. That means much of the senior housing news published each day does not relate as closely to these private funds.[Read more…] about Senior Housing Inconsistencies: Making Sense of Senior Housing Investment News