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Strategies & Market Trends : Value Investing
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To: Grommit who wrote (71563)11/13/2022 11:06:04 AM
From: E_K_S  Read Replies (1) of 78752
 
Not All REITs are equivalent; Medical REITs included

Perhaps the common thread is most/all medical REITs get reimbursements from medical insurance (including Medicare). Not sure one can say the same thing for an Industrial REIT vs Data warehouse REIT vs mixed use REIT.

Medicare payments are a large % of US GDP. ( Medicare spending is projected to rise from 4 percent of GDP in 2021 to about 6 percent of GDP by 2052). Total Medicare expenditures in 2017 were $705.9 billion.

What is interesting is OHI owns some medical properties in the UK and they have a more liberal Government 'medical' payment system. OHI facilities in the United Kingdom (Operators:4 Facilities:88). As a result, their UK FCF could be seen as more stable w/ the backstop of the government making those payment reimbursements.

OHI has been my best Medical REIT;
Through 2021, Omega ranked 2nd among healthcare REITs with a 214.2% ten-year total shareholder return and was 50th in total shareholder return among all REITs. Omega’s 10-year total shareholder return also outperformed the RMS’s return of 197.1%. It marked the twelfth consecutive year in which Omega was in the top fifty of all REITs in 10-year total shareholder return.

We have consistently increased our dividend, producing annualized growth of 8.3% per year since 2003. Learn why we're investing in a growth market, and what it will mean for the future of senior care.

It all comes down to the quality of management and that is the wild card w/ some of these REITs. You do make a good point that building/services for the medical REITs are different and their assets are not easily converted for different use.

Converting Single Use REITs to Mixed Use REITs

FWIW; I hold MAC as a recovery/transition play. My thesis is they may/could convert some of their properties to 'mixed use' vs single Mall property use. It takes a large capital infusion, zoning changes and must be in the right location. Only until there are actual conversions done, the market has not priced any premium for this type of transition investment/opportunity. Perhaps these type of conversions are easier to do than others.
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