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Health Care REIT CEOs Pinpoint Demographics, Consolidation as 2013 Themes

01/07/2013 | By Carisa Chappell

As the sector remains one of the most active on the acquisitions front, health care REIT CEOs spoke with REIT.com about what they anticipate will be some of the dominant trends in the sector for 2013.

Debra Cafaro, chairman and CEO of Ventas Inc. (NYSE: VTR), pointed to graying demographics as being one of the primary trends in the health care sector.

“It is an inexorable, powerful trend. The over-85s are the fastest growing segment of the United States’ population,” she said. “That's the cohort that uses skilled nursing and uses our senior housing facilities from coast to coast.”

Cafaro added that the baby boomer population in the U.S., currently comprised of about 79 million people, is also an important demographic within the health care sector. She said the first group of baby boomers became Medicare-eligible in 2011.

“There we see our medical office building and outpatient setting really serving that population,” she said.

Jay Flaherty, chairman and CEO of HCP Inc. (NYSE: HCP), noted that partner operators in the health care space will experience a lot of consolidation activity.

“As a derivative of that, real estate portfolios will fall out of that activity, which will then present themselves for the health care REITs to take a look at, he said.

Wendy Simpson, president and CEO of LTC Properties (NYSE: LTC), said one of the big issues will center on reimbursement levels and the type of facility where patients will be receiving their care—whether assisted living facilities, skilled nursing or hospitals.

“Assisted living (facilities) are keeping residents a little longer, so they are a little more frail in the homes,” said Simpson, adding that the question remains as to when will they move to skilled nursing homes and hospitals.