The senior housing sector is increasingly embracing artificial intelligence (AI), which is poised to significantly enhance productivity and generate cost savings, according to insights from Jefferies. This technological shift comes at a time when the sector is benefiting from demographic trends, such as an aging population and declining fertility rates, with the first baby boomers reaching the age of 80 this year.
Analyst Jonathan Petersen highlighted that advanced analytics are transforming sales execution and pricing strategies within senior housing portfolios. These enhancements actively support growth in same-store net operating income (NOI). Major players like Ventas OI and Welltower Business System are leveraging large, proprietary datasets to optimize pricing, marketing expenditures, and leasing performance at the unit level.
Welltower, in particular, is noted for having a significant advantage over its competitors in the AI domain. Petersen, who maintains a buy rating on Welltower’s stock, emphasizes its robust capabilities, which contribute to a dividend yield of 1.4%. The company oversees a portfolio of over 2,500 senior and wellness housing communities and has invested heavily in developing its proprietary data science and machine learning platform for over a decade. In 2023, Welltower integrated OpenAI to enhance its internal AI solutions.
CEO Shankh Mitra recently shared insights at a conference, revealing that the company has invested hundreds of millions of dollars to build an extensive data science platform that supports effective capital allocation. Earlier this month, Welltower also announced a licensing agreement for a customized version of its data science platform with Public Storage. Mitra pointed out the historical challenges in scaling the real estate industry, which he described as being often driven by instinct rather than data. He underscored the belief that true scalability in this sector can only be achieved through the data generated by its assets.
As a result of these advancements, shares of Welltower have appreciated by over 12% year to date.
Petersen also expressed optimism about American Healthcare REIT, which he sees as another key player poised to benefit from the integration of AI in the industry. Public since 2024, the company offers a dividend of 1.9%. Petersen previously identified it as his top investment choice for the aging population for 2026, citing factors such as its low cost of equity and expanding investment pipeline. Similar to Welltower, American Healthcare REIT’s stock has risen approximately 12% this year.
