NEW YORK ( TheStreet) -- Real estate investment trusts (REITs) that specialize in senior and healthcare facilities have seen a rebound in 2010 with investors betting that the horde of aging baby boomers will buoy the group's long-term prospects.
Standard & Poor's is fairly bullish as well as it expects the healthcare REITs to be relatively stable over the next 12 months. The ratings agency doesn't expect these owners of healthcare and medical office properties to share in the difficulties of facility operators when it comes to reform. Instead, they should continue to generate huge cash flow from rent payments. Specifically, S&P expects private senior facilities to see growing demand and not be affected by changes in government subsidies.
Recent increases in occupancy at senior care facilities would seem to bode well for the group. According to the National Investment Center for the Seniors Housing & Care Industry (NIC): "The average occupancy rate for assisted living properties in 2Q10 was 88.3%, up from 87.8% in 1Q10 and a year ago, in 2Q09." NIC also determined that 15 out of 31 metropolitan areas recorded an annual occupancy increase in the second quarter of 2010.
The healthcare REITs slid along with most other publicly traded real estate vehicles after the housing bust, but they look to be on the road to recovery now. Here are the top five performing healthcare REITs, according to stock screening Web site Financial Visualizations.