Healthcare REIT Thrives on Aging Population Trends

Author

Adam Garcia
May 15, 2025

Healthcare REIT Thrives on Aging Population Trends

Healthpeak Properties, Inc. (NYSE: DOC), a powerhouse in healthcare real estate, is a buy-and-hold gem capitalizing on surging demand for medical office and life science properties. 

Q1 2025’s 7.0% same-store net operating income (NOI) growth, surpassing estimates, underscores its strength, making the current sin-$18 price an attractive entry point. 

Outpacing peers like Alexandria Real Estate Equities (NYSE: ARE), Healthpeak’s strategic focus and high-quality assets position it for long-term dominance in the healthcare sector.

Smarter Trades (Sponsored)

Imagine knowing the historic win rate of a trade before placing it—70%, 80%, even 90%+.

These FIVE Candlestick Pattern Cheatsheets reveal high-probability setups and help identify precise entry and exit points.

Backtested and simplified for real-world trading, these tools are designed to reduce emotion and increase confidence.

They’re now available for free, while supplies last.

[Claim Your Free Candlestick Cheatsheets]

*The profits and performance shown are not typical and you may lose money. We make no future earnings claims. All trades expressed are from historical, backtested data in order to demonstrate the potential of the system.

Operational Overview and Recent Earnings

The healthcare real estate sector thrives on leasing medical office buildings, life science facilities, and continuing-care retirement communities (CCRCs) to credit-grade tenants like Amgen and Google. 

Operations center on top U.S. markets, supporting healthcare delivery and biotech research. In Q1 2025, adjusted funds from operations (AFFO) reached $0.46 per share, missing estimates by $0.01 due to nonrecurring expenses, but same-store NOI soared 7.0%, beating the 4.4% forecast. 

Medical office NOI grew 5.0% (vs. 4.1% expected), and life science surged 7.7% (vs. 3.5%). 

Management reaffirmed 2025 AFFO guidance of $1.81-$1.87, aligning with the $1.86 estimate.

AI (Sponsored)

AI’s capabilities are growing rapidly—handling layered conversations, correcting itself, and adapting in real time.

This shift is opening up new frontiers for early investors.

A free report just revealed 5 high-potential stocks—including one under-the-radar name with breakout potential.

These tickers are positioned to ride the AI boom in its most advanced form yet.

[See the Top 5 AI Stocks – Free Access]

(By submitting your email address, you will receive a free subscription to the Profit From The Pros e-letter, and offers from us and our affiliates that we think might interest you. You can unsubscribe at any time.)

Long-Term Healthcare Sector Prospects

An aging population and regulatory shifts create powerful tailwinds. The Affordable Care Act’s push for cost-efficient, high-quality care drives demand for medical office buildings, projected to reach a $100 billion market by 2030. 

The 80-plus demographic, spending four times the national average on healthcare, will nearly double by 2035, boosting life science leasing by 5% annually for biotech and pharma tenants. 

Class A properties in top research hubs ensure stable tenancy, with consistent demand shielding the sector from regulatory changes and supporting sustained NOI growth.

Strategic Positioning and Competitive Edge

A commanding presence in the $1 trillion U.S. healthcare real estate market drives success, with 55% of NOI from medical office, 35% from life science, and 10% from CCRCs. 

The $5 billion Physicians Realty Trust merger in March 2024 added 16 million square feet of medical office space, boosting affiliations with top health systems to 94%. High-quality assets in San Francisco, San Diego, and Boston attract investment-grade tenants, supporting a 2.9% NOI CAGR forecast through 2034, outpacing the 2% REIT average. 

Disposing $4 billion in senior housing since 2020 and investing $500 million annually in developments at 7.5% yields fuel growth.

Action: Add shares below $18, capitalizing on market strength. Track medical office leasing and development yields in 2025 filings.

Financial Outlook and Valuation

A solid balance sheet, with a 5.2x net debt/EBITDA ratio and $1 billion in liquidity, supports $200 million in annual acquisitions and $80 million in dispositions. Q1’s $0.46 AFFO and $150 million in free cash flow reflect steady rental income, with 2025 net debt/EBITDA projected at 5.2x and EBITDA/interest at 5.6x. 

Valuation metrics signal undervaluation at a 2025 EV/NOI of 15x, with NOI growth expected at 4.2% for 2025, moderating to 2.9% long-term. Repurchasing 5 million shares at $18.22-$19.45 enhances value. ROIC, at 6.6%, is set to reach 7.3% by 2034.

Action: Build holdings below $18, leveraging undervaluation. Monitor free cash flow and acquisition activity in 2025 filings.

Bear Case: Continued Trade Volatility 

  • Changes to the Affordable Care Act could disrupt tenant demand. 

  • Reduced biotech research investment may lower life science re-leasing spreads. 

  • New management’s limited experience risks weaker tenant ties. 

  • Reinvesting senior housing proceeds carries execution risk.

Action: Hedge with broad-based healthcare ETFs to offset regulatory and tenant risks, diversify across other healthcare REITs to strategically specialize in real estate trends. 

Outlook

Strong Q1 results, with 7.0% NOI growth, signal resilience despite a slight AFFO miss, supported by reaffirmed $1.81-$1.87 AFFO guidance. 

A 2.9% NOI CAGR forecast, driven by medical office and life science leadership, ensures steady cash flows. 

Strategic acquisitions and development pipeline growth, fueled by demographic and regulatory tailwinds, position the portfolio for sustained expansion.

Action: Build holdings below $18, leveraging healthcare dominance. Track life science NOI and merger synergies in 2025 reports.

Healthcare’s Real Estate Triumph

Robust Q1 performance, strategic focus, and healthcare tailwinds make Healthpeak a long-term leader, poised to thrive with consistent growth and stable returns.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

Click here to get our daily newsletter straight to your cell for free.

P.S. Just like this newsletter, it's 100% free*, and you can stop at any time by replying STOP.

Legal Stuff: Stocks featured in this newsletter are for entertainment purposes only. You should not base any investment decisions on information contained in my newsletter. Stocks featured in this newsletter may be owned by owners/operators of this website, which could impact our ability to remain unbiased. Please consult a financial advisor before making any trading decisions. I may earn a small commission from links placed inside these emails.