REITs look forward to stabilizing growing portfolios in coming decade – Business Daily News


Occupancy rates likely have bottomed out, and growth opportunities are on the rise, according to presenters yesterday at Nareit’s REITweek Investor Conference.
It is rare for internal growth and external growth to be on track at the same time, according to Shankh Mitra, Welltower’s CEO and chief investment officer.
“We are at a unique point in our history that we think that we can create significant shareholder value for our owners on both ends, both internal and external,” he said.
In the near-term, said Tim McHugh, chief financial officer at Welltower, the real estate investment trust has moved toward a more normalized way of doing things at a better rate than expected.
A new paradigm exists for the next decade due to the aging population, Mitra said. Supply and demand have completely flipped, whereas previously, supply chased demand, he said.
In the long-term, the CEO said he expects that new relationships forged during the pandemic will “create visible and significant long-term capital deployment opportunities.”
Jennifer Francis, president and CEO at Diversified Healthcare Trust, in a separate presentation said that the senior living sector of the investment company struggled through the pandemic.
“Our operators and tenants are working very hard to stabilize this phase,” she said.
DHC is transitioning away from Five Star Senior Living as managers of properties in its senior living portfolio, Francis said, reiterating previously announced news that Five Star now is focusing on larger properties and getting out operating skilled nursing facilities.
But the outlook for senior housing is good, according to DHC Chief Financial Officer and Treasurer Rick Siedel.
“We think occupancy has bottomed out, and we are encouraged that we really saw move-ins come back … the most move-ins we’ve had since before the pandemic started,” he said.
Month over month, leads were up from April to May, according to Siedel.
In a third talk, Dave Sedgwick, president and chief operating officer at CareTrust REIT, said that the skilled nursing sector has been battling decreasing numbers for the past decade due to what he called the “baby bust.” Birth rates were low before the baby boom that followed World War II, Sedgwick pointed out, but the industry is about to experience the beginning of a 20-year tailwind from the “silver tsunami” in three or four years.
COVID-19 has made underwriting more complicated, but CareTrust does not “expect a change of tone or priority” in how the REIT conducts business, he said.



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