Understanding healthcare REITs
Healthcare REITs own, operate, manage, acquire, and develop healthcare-related real estate. These facilities include senior living communities, hospitals, medical offices, outpatient facilities, life science innovation and research properties, and skilled nursing facilities.
Most healthcare REITs make money by leasing space in their facilities to tenants, such as healthcare systems, primarily under triple-net leases. This lease structure requires the tenant to cover maintenance, real estate taxes, and building insurance. The structure provides REITs with a very predictable stream of rental income, making them ideal stocks to invest in during a recession.