U.S. senior housing REITs poised for growth as aging demographics drive demand

U.S. healthcare real estate investment trusts (REITs) with exposure to senior housing are expected to benefit from a confluence of demographic and economic trends in the coming year. An aging population, rising healthcare spending, and constrained new supply—due to higher construction and financing costs—are creating favorable market conditions for sector leaders.

After pandemic-induced declines in 2021, occupancy rates across senior living facilities have steadily improved. In 2025, Welltower (NYSE: WELL) and Ventas (NYSE: VTR) are projected to reach occupancy rates of 87%, up from 83% and 85% in 2024, respectively. Sabra Health Care REIT (NYSE: SBRA) is expected to climb to 86%, from 84% last year.

As construction of new facilities slows and demand from baby boomers accelerates, rental revenues have also been on an upward trajectory. Welltower, the largest player in the group by market capitalization, is forecast to generate $7.8 billion in rental income from senior housing in 2025—a 27% year-on-year increase. Ventas is projected to see a 15% rise to $3.9 billion, while Sabra and American Healthcare REIT (NYSE: AHR) are expected to report gains of 12 and 19%, reaching $320 million and $305 million, respectively.