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All Lights Flashing Green For Medical Properties Trust


  • One of the most critical property sectors within the range of healthcare facilities is hospitals.
  • Hospitals are essential for emergencies, intensive care, and higher-end procedures. The critical demand components offer a compelling runway for growth opportunities.
  • The hospital services sector is highly fragmented, and there is an opportunity for continued consolidation.
  • Even though MPW has hit an all-time high, I believe there’s more room to run, so I’m maintaining a buy.
  • This idea was discussed in more depth with members of my private investing community, Rhino Real Estate Advisors. Get started today »

Last week I was speaking to investors at a packed house at the MoneyShow in Orlando, and I referenced the best property sectors to invest in during recessions. Although I’m not fearful of a recession in 2019, I am becoming increasingly hawkish that a modest recession could begin to unfold in late 2020.

As I told the crowd, there’s no need to ring the alarm bell yet, and even when the next recession rings, I am confident that most REITs are better prepared than they were in the Great Recession of 2008. I told the group one of the most defensive plays is the healthcare sector.

The dominant proposition is that consumers will continue to spend money on their healthcare even during economic or market downturns. Catalysts like an aging population and longer life expectancy are also relevant, and point to increased demand for healthcare services.

One of the most critical property sectors within the range of healthcare facilities is hospitals, which are the “hub of every comprehensive health system,” according to MPW. Hospitals are essential for emergencies, intensive care, and higher-end procedures, and the critical demand components offer a compelling runway for growth opportunities. In addition, hospitals are difficult to relocate, due to regulatory approvals, funding, and permitting.

The supply and demand fundamentals make hospitals an attractive asset class. Hospitals generate strong revenues even if beds are not filled; unlike skilled nursing operators, hospital lease payments are contractual and cannot be unilaterally adjusted by the operator.

The hospital sector represents the single largest category of personal healthcare spending in the U.S. In 2017. Total hospital care expenditures increased by around 4.6% over 2016, amounting to over $1.1 trillion. CMS estimates the hospital services category will amount to nearly $1.2 trillion in 2018 and projects growth in this category at an average of 5.5% annually from 2018 through

We are getting ready to commence the annual REIT bracketology series, in which veteran analyst Brad Thomas will be calling the play-by-play for all property sectors. This year is going to be another "dividend dandy" showdown between the stalwart players and the up-and-coming sharp-shooters.

Maybe there will be a Cinderella story this year? You don't want to miss this series, in which marketplace members will have access to our newest portfolio tools, delivering stats for all the teams, so that you can sleep well at night. Get your front-row ticket now.

This article was written by

Brad Thomas profile picture
Leader of iREIT on Alpha
The #1 Service For Safe and Reliable REIT Income

Brad Thomas is the CEO of Wide Moat Research ("WMR"), a subscription-based publisher of financial information, serving over 100,000 investors around the world. WMR has a team of experienced multi-disciplined analysts covering all dividend categories, including REITs, MLPs, BDCs, and traditional C-Corps.

The WMR brands include: (1) iREIT on Alpha (Seeking Alpha), and (2) The Dividend Kings (Seeking Alpha), and (3) Wide Moat Research. He is also the editor of The Forbes Real Estate Investor

Thomas has also been featured in Barron's, Forbes Magazine, Kiplinger’s, US News & World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. 

He is the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022 (based on page views) and has over 108,000 followers (on Seeking Alpha). Thomas is also the author of The Intelligent REIT Investor Guide (Wiley) and is writing a new book, REITs For Dummies. 

Thomas received a Bachelor of Science degree in Business/Economics from Presbyterian College and he is married with 5 wonderful kids. He has over 30 years of real estate investing experience and is one of the most prolific writers on Seeking Alpha. To learn more about Brad visit HERE.

Analyst’s Disclosure: I am/we are long OHI, MPW, VTR, NHI, HTA, DOC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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