• Healthcare REITs - which were the weakest-performing property sector in 2021 - have been one of the top-performing REIT sectors in early 2022 as COVID headwinds finally begin to abate.
• After a decade of lackluster performance and strenuous portfolio repositioning, the long-awaited demographic tailwinds are finally arriving for senior housing REITs, while new supply growth has moderated.
• Encouragingly, the Omicron COVID wave merely slowed - but didn't derail - the demand recovery. Staffing shortages have been the more critical issue of late, and some operators are faring better than others.
• With nursing shortages likely to persist, and with a dimming outlook for significant further COVID relief funds, caution is warranted for Skilled Nursing and "public-pay" healthcare REITs which appear fully valued.
• Lab space demand from biotechnology and pharmaceutical companies remains insatiable, however, and has actually seen accelerating demand from the pandemic. Key geographic clusters serve as barriers to entry.

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