Tuesday, September 26

Welltower: Our Next Big Real Estate Play

As we continue to diversify our portfolio heading into a particularly brutal period of high interest rates, we need to be mindful of trends that have already proven to be successful in our previous picks. 

One long-term trend we're keeping a close eye on is how rapidly America's richest generation (e.g. the Baby Boomers) is settling into retirement and their need for senior care. 

This surging demand for care has caused our GE Healthcare pick to increase over the past year. But there are a lot of angles to play here in an age when boomers will need more care than ever. 

This is why we're shifting our focus to the real estate side of things with new coverage in Welltower ($WELL). Welltower is a REIT (real estate investment trust) that specifically focuses on Senior Living facilities, outpatient care facilities, and extended care facilities like rehab. Their primary holdings are in those senior care facilities, and the numbers they are about to put up as 1 million people a year enter the 80 years+ cohort, are astounding. 

Basically, COVID caused a complete collapse of the housing supply for senior living as pandemic fears pushed folks to seek other forms of individualized care. Now that demand is starting to surge again, only REITs that were able to spread their risk around and take years of reduced revenues will be able to grow. Welltower has weathered this low-demand period without needing to leverage up like other REITs and therefore has a lot more agility in terms of expanding into new markets and extending its nationwide dominance. 

Spending is about to explode in this space, and for the next few years, low supply is going to cause an even greater surge in prices. So, let's discover how Welltower is poised to become completely dominant thanks to its relatively strong position.👇

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