Seniors Housing Weekly Update: REITs Keep Rising
July 10, 2012
REITs Keep Rising
Is there anything that will stop the health care REIT stock surge? More than half the health care REITs hit new 52-week highs in June, and six more have done it again in the first 10 days of July. One of the REITs that has not hit a new high is Senior Housing Properties Trust, but on July 9 it announced it was going to sell 8 million new shares. On July 10, it sold 12 million shares, 50% more than it was originally going to offer, and this is before the underwriters cash in their option to purchase another 1.8 million shares. Dividend yields on the larger REITs are down to the 4% to 5% range, the lowest ever in their history, yet demand continues unabated. The reason? Investors like health care, they like seniors housing, but they don’t like the share price track record and its lack of consistency. What they do like is the steady dividend growth and somewhat steady price increases of the REITs, without having to pick an operator or sector. It’s been a win-win, as long as the REITs can wisely invest their capital and not move down the quality curve. Will the acquisitions be there? Stay tuned.