The Demographic Engine Behind Healthcare REITs

Healthcare has added jobs through almost every macro environment of the past two decades, one of the few parts of the labor market to expand more or less without interruption. The June 2026 payrolls report made the point in unusually stark terms: overall hiring was soft, yet healthcare accounted for the large majority of the net jobs created that month¹. When the rest of the economy stalls, healthcare keeps hiring.

Healthcare Jobs as a Job Creation Driver (July 2023 – June 2026)

Source: Bloomberg, Bureau of Labor Statistics, July 2026.

The reason is in fact structural. The population is aging, older people consume more healthcare, and the demand for care does not move with the business cycle.

Per-person health care spending by age group, US 2020

Source: Centers for Medicare & Medicaid Services (CMS), Office of the Actuary — Health Expenditures by Age and Sex, 2020.

The share of Americans aged 65 and over is climbing steadily and will keep climbing for decades. More important for real estate specifically, the oldest cohort, those most likely to need assisted living, skilled nursing, or memory care, is set to grow fastest of all. That is the population that fills senior housing.

Growing Share of Elderly Population

Source: Bloomberg, US Census Bureau, 2023 National Population Projections Tables: Main Series.

One caveat worth making explicit: the pace of healthcare hiring has been cooling for three years running after COVID rebound. Healthcare's outsized share of recent payrolls headlines reflects weakness elsewhere in the labor market as much as strength in healthcare itself. The long-run demand is real and well-documented; what has changed is that healthcare now stands out because so little else is growing. For a real-asset investor, that distinction matters less than the direction. And the direction has been consistent for twenty years.

Where the jobs live and what that could mean for Healthcare REITs

Not all healthcare job growth lands on the same kind of building. The fastest-growing corners of the sector are the ones tied most directly to an aging population: home health, services for the elderly, assisted living, and continuing care. The occupations driving that growth (nurse practitioners, therapists, home health aides) are precisely the people who staff senior housing, post-acute facilities, and outpatient medical buildings. In effect, the labor market might be viewed as a forward indicator of demand for the real estate healthcare REITs own.

Supply has not kept up

What makes the current moment interesting for REITs is that supply has not matched the demand signal. Seniors housing occupancy has climbed back to its highest level in roughly a decade², while new construction sits near multi-decade lows — completions collapsed after the pandemic and have not recovered³. Demand is absorbing space faster than developers are adding it, and that imbalance is showing up in occupancy and pricing power for the operators and landlords already in the market.

The listed names reflect it. The largest senior-housing REITs have been posting sustained double-digit growth in same-store operating income⁴, and both diversified⁵ and net-lease players have been net buyers rather than sellers⁶, not the behavior of investors who think the cycle is turning. The sector's total-return index recently reached an all-time high, recovering fully from the two large drawdowns of the past six years, the COVID shock and the 2022 rate cycle. That last episode is a useful reminder: healthcare REITs carry real interest-rate sensitivity, and rising long-end rates can compress valuations quickly regardless of how strong the underlying operations are.

Rise of Healthcare REITs in the US (July 2006 – June 2026)

Source: Bloomberg, July 2026. Past performance does not predict future returns.

Healthcare REITs in TRET

VanEck's Global Real Estate UCITS ETF (TRET), launched in April 2011, holds ten healthcare-focused REITs as of 1 July 2026, together making up close to a fifth of the fund. The exposure spans senior housing, medical office, skilled nursing, and primary care, across the U.S., Europe, and the UK, a multi-geography read on the same demographic trend.

Four names account for the bulk of that exposure, and each represents a distinct angle on the theme.

Welltower is the fund's largest holding⁷ and the dominant name in the senior housing operator model, where the REIT takes direct exposure to occupancy and revenue rather than collecting fixed rent. It partners with operators across assisted living, independent living, and memory care in high-barrier markets in the U.S., Canada, and the UK. The structure is more volatile than net lease, but it captures the full upside of the current occupancy recovery, which is why it has led the sector.

Ventas is the most diversified of the majors, pairing senior housing with life science and medical office. That mix gives it exposure to both the aging-population thesis and the structural demand for research and outpatient space. It has been actively repositioning toward higher-growth assets, funding senior housing acquisitions in a market where tight supply favors the buyer.

Healthpeak Properties sits at the outpatient end of the spectrum, focused on medical office and life science after largely exiting senior housing. Its tenants are health systems, physician groups, and biotech, less tied to the oldest cohort than Welltower or Ventas, but a direct beneficiary of the long-term shift toward outpatient care. Healthcare Realty Trust plays a similar role at smaller scale in the Sun Belt.

Omega Healthcare Investors and Sabra Health Care REIT are the fund's skilled nursing net-lease names, leasing facilities to operators under long-term triple-net structures. They carry more reimbursement risk than the private-pay senior housing names, given their dependence on Medicare and Medicaid, but that risk is reflected in their valuations, which leaves room for re-rating if occupancy and policy hold.

Key Risks

Policy is the main risk, and it is concentrated in the government-reimbursed corners of the sector. Financing changes enacted in 2025 point to substantial Medicare and Medicaid reductions over the coming decade, and payment growth for skilled nursing is already decelerating. Senior housing's private-pay model is more insulated than skilled nursing, a real distinction when deciding where in the healthcare REIT spectrum to take exposure. A wall of loan maturities in 2027–2028 is a second thing to watch, likely to test weaker-balance-sheet operators even as occupancy climbs.

Looking Forward

The broader picture is that the labor market and the demographic projections tell the same story, and the supply constraint adds a third layer. Healthcare has been the most consistent source of job creation in the U.S. economy for two decades. The population driving those jobs, including aging, increasingly in need of facility-based care, and growing faster than the construction pipeline, is also the tenant base for senior housing and post-acute real estate. The risk sits on the policy side, not on demand.