Investment Sector To Watch: Healthcare REITs

Today’s article discusses the healthcare REIT sector. This is an asset class that is currently out of favor, offering high dividend yields and a defensive moat.

Healthcare REITs are publically traded real estate investment trusts that own medically related properties. Places like doctor’s offices, hospitals, clinics, and assisted living centers.

Many of these REITs have seen their share prices drop in the past week or so, because of pandemic fears. And I want to use this article to discuss why healthcare real estate might be a good investment. Especially if negative sentiment continues.

Essential, Wide-Moat Businesses

Many healthcare services had to stay open during the pandemic because people’s lives depended on it. This is very different from real estate like shopping malls or gyms, since hospitals and clinics cannot be closed.

Additionally, many treatments must be performed in-person.

Issues like the pandemic, work-from-home, or online shopping can all hurt traditional retail space and offices. But, there are many medical procedures that simply cannot be outsourced.

I’ll give two personal examples.