Senior living and health-care-related properties have been a stable investment since 2007, outperforming most real estate sectors since the recession. Possible reasons for stability in this sector include the fact that people are living longer, owning and maintaining a house is more expensive, and the Affordable Care Act is providing some citizens with insurance for the first time, making the chances of more hospital visits highly likely. In 2014, health-care-focused REIT shares produced returns and dividends of 35.5% and sales involving senior housing and nursing facilities totaled $17.4 billion in 2014, more than a 17% increase from 2013. In the fourth quarter of 2014, occupancy of healthy senior living facilities was 91.3%, which was the highest it’s been since 2007.
The healthcare sector of real estate is also seeing an increase in square footage dedicated to health-related offices creating a higher demand for physicians. Although the square footage being dedicated to healthcare is on the rise, it is also becoming more efficient as far as costs go. Eric Carmichael, a developer for Frauenshuh HealthCare Real Estate Solutions said, “Any space that sits idle is excess overhead.” As the commercial real estate sector continues to grow it is safe to say that health care real estate development continues to be a good investment option, especially in areas prone to an influx of retirees.