2 ways to invest in life science real estate through stocks

THEIfe science facilities are perhaps the hottest real estate sub-sector right now, and there are some great ways for investors to get in on the action. In this fool live Video clip, recorded on September 3, Matt Frankel, CFP, Senior Real Estate Analyst at Millionacres, discusses two excellent stocks with broad portfolios of life science properties.

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Matt Frankel: Could you talk to ARE, which is Alexandria real estate actions (NYSE: ARE)? It’s an interesting business. It is an office REIT specializing in life science properties, offices for life science companies. They are a great combination of healthcare and the office. Real estate in the life sciences sector is currently a major growth area.

Innovation in healthcare, life sciences and pharmaceuticals has never been more active than it is today. I’m not just talking about COVID vaccines and things like that. There has been an exponential need for facilities for those companies that make medical devices, that make therapeutic products, that make pharmaceuticals. Much of it is concentrated in the San Francisco area. The Boston area is a big region, where I think Alexandria is very present. It is a stock that we like very much. If there is a downside, it would be the appraisal.

Life science properties, I don’t mean to say they’re in a bubble, but valuations have increased tremendously over the past few years, as has demand. So I’m a fan of it. I don’t own the shares myself, but it’s a very good business model. If you want exposure to life science properties without relying solely on them, I would look at a company called Properties of Healthpeak (NYSE: PIC). The ticker symbol is PEAK. It is a healthcare REIT, but invests primarily in life science properties and medical practices. They also have a small presence in what are called continuing care retirement communities. But the life sciences and doctor’s offices, which are doctor’s offices like the safety net, I guess you’d call with the life sciences. Life sciences is the area of ​​growth for this business, and medical practices are stable and making money regardless of the type of property. Doctors’ offices, for example, are probably the best performing type of real estate during the closed months of 2020, because there is no business more essential than having a doctor’s office to go to, and they have actually benefited when hospitals stopped doing elective procedures. Many of them have been transferred to an outpatient clinic.

Matthew Frankel, CFP owns shares of Healthpeak Properties, Inc. The Motley Fool recommends Alexandria Real Estate Equities and Healthpeak Properties, Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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