Healthpeak Properties (DOC -0.14%) is a real estate investment trust, or REIT, that focuses on healthcare properties -- specifically life science, medical office, and senior housing. In this Fool Live video clip, recorded on Nov. 15, contributor Matt Frankel discusses why Healthpeak is one of his larger investments, and one that he doesn't plan to sell anytime soon.

10 stocks we like better than Healthpeak Properties, Inc.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Healthpeak Properties, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of November 10, 2021


Matt Frankel: Healthpeak Properties is a real estate investment trust. It's one of two healthcare real estate investment trusts you're going to hear about today. Popular category among this group. But this is definitely the bigger of the two. It's the more diversified of the two. About an $18 billion market cap company. They specialize in three different types of healthcare properties. They have senior housing, which they specialize in a type of property called continuing care retirement communities. These are if you ever see a retirement community near year where they have some assisted living, they have some independent houses that are just on the property. A few different levels of care designed to be somewhere the 55 and up crowd can move live independently and then gradually step up in care as they need it.

That's their smallest type of property then they have medical office buildings which are slow and steady, no matter what, I can't think of a much more essential type of property than medical offices. Then No. 3, last but certainly not least they are specializing in life science properties. I wanted to share something that hopefully would change some of your minds. This is actually helps support Jason's stock that he is going to talk about. This is why they are all-in on life science. They're focusing almost their entire development budget on life science properties.

These are facilities that are occupied by companies like Pfizer and Johnson and Johnson, places where they develop drugs. The graph on the left definitely helps Jason's thesis on his the aging senior population, the 65 and over age group from 2010 through 2026 is going to be 60% larger. Sixty-five million senior citizens in the U.S. in 2026, there were only about 40 million in 2010. That's a big jump. As we know, as you age, the odds of you taking more prescription drugs are greater.

Look at the next one. Global Drug demand up 90% in that 16-year time period, which we're a little over halfway through now, about two-thirds of the way through actually. Regulatory environment has become much easier to, not easier, but it's become more expedited to move drugs through trials. Think of how quickly the COVID vaccines were able to go through trials that were some definitely, they had some regulatory help on that issue. But a generally supportive regulatory environment and a lot of money is being spent developing drugs.

If you look at that last chart on the right, that's where the money is. The amount of money being spent on prescription drugs. Now, that's not 2026, that's the 2021. Annual spending on prescription drugs has quadrupled since 2010. They need facilities to develop these. They're clustered in very high-cost real estate markets like San Francisco and Boston. That's what Healthpeak does, they are all-in on the life science, which is really why I'm harping on that so much. I think life science is just getting started in terms of really building out its physical infrastructure.

There's going to be a lot of, I mean, medical advancement has never been more rapid than it is now. Medical advancement needs physical space and state-of-the-art modern space to operate in. Pfizer, is it going to move into a facility that was built in the 1950s, they want a modern facility and that's why companies like Healthpeak are really all-in on life science.