After the many challenges of the COVID-19 pandemic, this could be a good time to invest in senior housing, according to Liz Brumer-Smith, a real estate investor and Motley Fool contributor. Five of the six main senior housing real estate investment trusts still are trading below pre-pandemic levels, she noted.
Higher vaccination rates and fewer COVID-19 cases are causing the senior housing sector to rebound, she said, noting that NIC MAP data showed that occupancy in senior living communities in the first quarter increased for the third quarter in a row.
“Given the industry’s impending recovery and the growing number of aging residents who may need senior housing, investing today could pay off big in the long run,” Brumer-Smith wrote.
The sector is not out of the woods, however, she told potential investors, noting that although occupancy seems to be rebounding, staffing challenges and necessary wage increases present their own woes for operators.
In a separate video presentation, John Chang, senior vice president of research services at Marcus and Millichap said that “Seniors housing was … hit hard, and they will continue to face a lengthy recovery cycle as the industry adapts to the new operating climate in a post pandemic world.”
Still, Brumer-Smith wrote, “Investors looking for long-term growth potential or competitive dividend returns should definitely consider investing. Healthcare REITs have certainly surpassed the lows at the peak of the pandemic but are still well below value, making right now an ideal time to buy.”
