Ventas Deal: Senior Care REITs a Promising Investment


Could nursing home REITs become a new investment trend? Image: LOLren/Flickr

Ventas Inc., the nation’s biggest owner of senior housing, bought Nationwide Health Properties, a real estate investment trust specializing in senior housing and long-term care facilities, for $5.8 billion today. Ventas already owns 55,000 senior beds and housing units in 44 states and Canada. Bloomberg has more:

The deal will form the largest health-care REIT in the U.S., according to the statement. Property deals are rising in the industry as real estate values recover. HCP Inc., currently the biggest U.S. health-care REIT by market value, agreed in December to buy 338 properties from Carlyle Group’s HCR ManorCare Inc. for $6.1 billion.

“The really big growth driver in health care is acquisitions,” Craig Guttenplan, an analyst at CreditSights in London. said in a telephone interview. “This is kind of a one- off deal to make them more competitive in the private market.”

Health care is the single-largest industry in the U.S. based on contribution to gross domestic product, HCP said on its website. The industry will account for about 20 percent of the economy by 2019, Ventas said in a January presentation.

By leasing their properties to health care operators, Ventas is positioned to cash in big time on retiring baby boomers. It is now the biggest health care REIT in the United States. And with average prices per (nursing home) bed hovering around record highs, senior care REITs are looking promising as an everyday investment, too.

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