11 Best REIT Stocks To Buy Under $10

2. Diversified Healthcare Trust (NASDAQ:DHC)

Share Price as of October 26: $3.40

Number of Hedge Fund Holders: 24

Diversified Healthcare Trust (NASDAQ:DHC) focuses on owning high-quality healthcare properties located throughout the United States. The firm owns approximately $7.2 billion of high-quality healthcare properties situated in 36 states and Washington, D.C., as of June 30, 2024. The REIT is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company focused on commercial real estate and related businesses.

DHC is a well-positioned national healthcare REIT. The firm’s institutional quality portfolio is diversified across the healthcare spectrum supporting long-term stable growth. With respect to the Senior Housing Operating Portfolio (SHOP) segment, the opportunity to capitalize on demographic trends is huge with an aging US population and a constrained supply. While the senior living demographic of the over 80 population is expected to grow at a 4.2% CAGR over the next 10 years, inventory growth is expected to remain depressed at 1.2%.

Simultaneously, the Medical Office & Life Science Portfolio leverages industry tailwinds such as rising demand for healthcare services driving the need for medical facilities, increasing chronic disease prevalence, and an aging population driving demand for pharmaceuticals. DHC’s triple net leased senior living communities and wellness centers also consistently deliver strong performance with best-in-class operators.

Another competitive advantage for DHC is being managed by RMR which has a depth of management and experience in the real estate industry. Simultaneously, the REIT believes that the management services provided by RMR cost less relative to what it would have paid if it was self-managed.

Diversified Healthcare Trust (NASDAQ:DHC) benefitted from favorable SHOP industry trends in Q2. The REIT recorded a 27% year-over-year increase in SHOP same property NOI. In the Medical Office and Life Science Portfolio, DHC witnessed a 12% increase in weighted average rental rates on over 100,000 square feet of leasing thereby marking the 4^th consecutive quarter of double-digit rent growth.

Thus, Diversified Healthcare Trust (NASDAQ:DHC) serves as one of the leading owners of real estate located across the United States focused on healthcare and life sciences. The firm has a solid portfolio that is all set to take advantage of the demographics and industry conditions.