A new REIT (real estate investment trust) is being formed in Chicago to monopolize on our aging society. ‘Aviv’ will be the name for the new REIT that will focus on leasing nursing home properties to operators.
Crain’s Chicago Business reports that nursing home expenditures are expected to jump as baby boomers retire. By 2017, it is expected that $218 billion will be spent annually on nursing home care compared with the $125 billion spent today.
REIT’s that focus on healthcare have done well in a slumping economy. According to the Bloomberg REIT Healthcare Index, healthcare REIT’s have returned 13% year to date compared with a -14% for the overall REIT index. According to a recent report from Green Street Advisors, Inc.,
Demand for health care real estate is primarily driven by people getting older and sicker, not by the state of the economy. Consequently, the weakened economy should have a more muted impact on the health care sector than on other property types.