Senior Housing Properties Trust: It’s Fallen, Can It Get Back Up?

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We’re getting old. We all are. But no one group is reaching ‘old age’ faster than the baby boomer generation born between 1946 and 1964. By ‘old age’ I’m referring to retirement, and unfortunately for many seniors, it means senior housing facilities. Today’s younger generation isn’t like that of days past, which cared for their elderly parents for many years. In today’s society, seniors are increasingly going into senior housing, whether independent living facilities, assisted living facilities, skilled nursing, etc.

This secular trend has not gone unnoticed and everyone from real estate developers to hedge fund managers has made investments in senior housing in anticipation of an increase in demand. The first baby boomers entered retirement age just a few years ago and even though people in general are living healthier lives for longer, traveling more and enjoying retirement for a few more years, the sheer number of baby boomers means that senior housing will be in greater demand.

REITs Are Oversold: It Seems To Be a Good Time to Be Greedy While Others are Fearful

Gekko, greed is good

Greed is good. Some of you might remember the phrase being said by Gordon Gekko, the Wall Street villain played by Michael Douglas in the 1987 film, “Wall Street.” The actual phrase was much longer:

Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A.

Warren Buffett, another well-known, but less fictional character has another quote along those lines:

Be fearful when others are greedy and greedy when others are fearful.

Investors have been fearful of interest rate rises and have dumped REITs. We think it’s a good time to be greedy.

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