Sweet REITs
Equity Real Estate Investment Trusts (REITs) are down 8% in 2007. Among the biggest losers are health-care REITs, down 10.5%. Fears of Medicare and Medicaid cutbacks have driven such REITs from favor.
The risk may be overstated, though. Cuts in Medicare and Medicaid are rare, because seniors are a powerful voting bloc. Moreover, many health-care REITs are moving away from hospitals and nursing homes into assisted living facilities and medical office buildings, which are much less reliant on government funding.
Health-care REITs may be considered defensive plays because demand for such properties has little to do with strength or weakness in the overall economy. And besides that, health-care REITs have payouts around 6% (better than for other REITs).
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The risk may be overstated, though. Cuts in Medicare and Medicaid are rare, because seniors are a powerful voting bloc. Moreover, many health-care REITs are moving away from hospitals and nursing homes into assisted living facilities and medical office buildings, which are much less reliant on government funding.
Health-care REITs may be considered defensive plays because demand for such properties has little to do with strength or weakness in the overall economy. And besides that, health-care REITs have payouts around 6% (better than for other REITs).
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posted by Bob Moser at
3:12 PM
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