Welltower (WELL) and other senior housing REITs could see stronger growth in 2027 as occupancy rises, pricing improves, margins expand, acquisitions add earnings, and companies shift more capital toward higher-growth senior housing assets, Morgan Stanley said in a note emailed Tuesday.
Low new supply and faster growth in the population aged 80 and above should keep demand above 90% and potentially reach 95%, while healthy balance sheets could support more acquisitions and investment, Morgan Stanley said.
The investment firm expects Welltower, Sonida Senior Living (SNDA), American Healthcare REIT (AHR) and Janus Henderson-backed senior housing platforms to benefit from higher occupancy, and continued operating improvements.
Morgan Stanley added that the life science property market should recover gradually in 2027 as supply falls and demand improves, though leasing, occupancy and upcoming lease expirations remain risks for some landlords..
Morgan Stanley kept Welltower at overweight and raised its price target to $251 from $215, while lifting Sonida Senior Living's target to $44 from $38 and keeping its equal-weight rating as it expects stronger earnings growth and better operating performance.
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