Q4 Healthcare REIT Highlights
Healthcare Realty Trust
- Leasing Performance: Healthcare Realty signed nearly 2 million square feet of new leases in 2024, with an all-time quarterly high of 690,000 square feet in Q4, highlighting record leasing momentum and sustained demand for outpatient medical space.
- Occupancy Gains: Multi-tenant occupancy increased by 149 basis points year-over-year, driven by strong new leasing and tenant retention rates, placing their occupancy growth rate at 50% higher than peer averages.
- Market Positioning: The REIT’s focus on densifying clusters around major health systems and targeting high-growth metros reinforces the durability of its leasing pipeline and rent growth potential in 2025.
Healthpeak Properties Inc.
- Leasing Volume: Healthpeak completed over 6.2 million square feet of leasing in 2024 across its outpatient medical portfolio, achieving 7% rent increases on renewal leases, far exceeding historical norms for medical office.
- Occupancy Stability: Occupancy ended the year at 92.2%, with tenant retention of 88%, underscoring the strength of long-term health system partnerships and sticky tenancy in its core markets.
- Portfolio Strategy: After selling $1.3 billion of non-core assets, Healthpeak has repositioned its capital toward development loans and health system-driven growth projects, aiming to expand its footprint in high-demand outpatient submarkets.
Ventas
- Leasing Acceleration: Medical office leasing increased by 15% compared to the prior year, with over 34% of its 2025 leasing target already completed by the start of the year, reflecting strong leasing visibility and demand.
- Occupancy Trends: While the portfolio saw some modest occupancy declines in Q4, early 2025 leasing success positions Ventas to recover occupancy losses and achieve net positive absorption during the year.
- Portfolio Focus: Ventas is prioritizing health system-anchored properties in Sunbelt states, where outpatient demand is highest, and continues to dispose of non-strategic assets, keeping its portfolio aligned with demographic growth trends.
Welltower
- Occupancy and Retention: Welltower’s outpatient medical portfolio maintained 94.3% occupancy with 93.6% tenant retention, demonstrating remarkable stability and the benefit of deep clustering around major healthcare hubs.
- Operational Efficiency: Through its regional clustering strategy, Welltower achieved operational efficiencies across maintenance, staffing, and capital expenditures, helping to offset rising insurance costs in 2024.
- Essential Demand Drivers: With healthcare delivery shifting steadily into outpatient settings and the aging population fueling long-term visit growth, Welltower expects sustained rent escalations and low turnover to support continued NOI growth.
Thoughts from the CEO’s
Macroeconomic Highlights
Q4 2024 Healthcare REIT Data Overview
| Healthcare Realty Trust (HR) | Healthpeak Properties Inc. (PEAK) | Ventas (VTR) | Welltower (WELL) | ||
| Ending Occupancy (Same Store) | 2024 | 89.80% | 92.20% | 90.10% | 94.40% |
| 2023 | 89.20% | 91.60% | 91.90% | 94.90% | |
| YoY Revenue Increase (Same Store) | 2024 | 2.9% | 4.4% | 2.4% | 4.1% |
| 2023 | 3.2% | 3.9% | 3.5% | -0.3% | |
| YoY Expense Increase (Same Store) | 2024 | 2.7% | 7.1% | 3.6% | 9.0% |
| 2023 | 4.1% | 3.2% | 6.9% | -7.3% | |
| YoY NOI Increase (Same Store) | 2024 | 3.1% | 3.1% | 1.8% | 2.0% |
| 2023 | 2.7% | 4.3% | 2.1% | 2.8% | |
| NOI/Occupied SF (Same Store) | 2024 | $23.21 | $22.83 | $23.70 | $26.94 |
| 2023 | $23.01 | $21.26 | $24.27 | $27.04 | |
| Average Lease Term Remaining (Yrs) | 4.4 | 6.2 | 6.8 | 7.0 | |
| Q4 Medical Office Acquisitions | 0 | 0 | 0 | 0 | |
| Total Properties | 651 | 519 | 397 | 429 |
Q4 2024 Healthcare Real Estate Operating Fundamentals
Healthcare Real Estate Lease Rates
Healthcare Real Estate Occupancy
Healthcare Real Estate Income & Expenses
Healthcare Real Estate Investment & Transaction Activity
Healthcare Real Estate Cap Rates & Bid-Ask Spread
Headwinds in the Healthcare Real Estate Market
Tailwinds in the Healthcare Real Estate Market
The medical office market experienced several tailwinds, including strong demand driven by health systems shifting patient care into lower-cost outpatient settings, as noted by Healthpeak Properties. This trend is expected to continue, supporting the long-term growth prospects of the medical office sector. Ventas highlighted an unprecedented multiyear growth opportunity in senior housing, driven by compelling secular demand, favorable pricing environments, and robust investment opportunities. The company reported year-over-year same-store cash NOI growth of nearly 16% in their senior housing operating portfolio (SHOP), underscoring the strong demand dynamics in the sector. Healthcare Realty Trust emphasized the steady, long-term growth of the outpatient medical space, benefiting from powerful secular demographic tailwinds and constrained supply, with new construction starts at historically low levels.
