NEW YORK CITY—An aging population is driving growth in the healthcare real estate sector. Yet some analysts are wondering whether near-term growth in the sector itself is showing a few gray hairs.

In a note to clients Tuesday, analysts at RBC Capital Markets reported that although third-quarter results for healthcare REITs "largely surpassed our expectations," with six of 10 companies beating their estimates, nonetheless they were lowering the coming year's earnings outlook for the sector by 1.4%. "We believe investment volumes across the space will moderate due to the increased volatility in the capital markets and higher leverage ratios in general," wrote analysts Michael Carroll and Rich Moore and associate George Clark at RBC. "Our estimates now reflect a median core earnings growth rate of 4.9% in 2016 and 4.4% in 2017."

REITs in general, and healthcare REITs in particular, "continue to face pressure, as the market widely believes interest rates will someday rise," the RBC analysts wrote. They noted that SNL Healthcare REIT index dropped by 6.9% last week, with a 5.1% drop this past Friday alone, as the positive October jobs report pushed the ten-year Treasury yield up by nine basis points.

"The ten-year Treasury yield has increased by only 19 bps year-to-date to 2.36%, but the SNL Healthcare REIT index dropped by 25.4% and has underperformed the SNL US REIT index by 19.1% and the S&P 500 by 26.3%," according to the RBC analysts. They estimated the average forward 12-month adjusted funds from operations multiple for their coverage universe at 12.3x. That multiple reflects "a two-turn discount to the seven-year historical average," a low not seen since Q2 2009, amid the depths of the global financial crisis.

In a blog posting on SeekingAlpha.com last month, prior to Q3 reports from Ventas Inc., HCP Inc. and Welltower Inc., Reuben Gregg Brewer cited concerns based on overfamiliarity with the sector's growth story. The REITs, he wrote, "lay out a compelling argument for a bright future. But it's the same story that has been around for some time and everyone knows it."

Accordingly, Brewer wrote, "It shouldn't be too surprising that healthcare properties are being bought at cap rates that are lower than the largest, strongest and most diversified REITs in the space are happy with. And, thus, they are pulling back or at least being far more cautious. At the same time, these companies are seeing their debt costs heading higher, further pinching their potential profits from dealmaking. That's the boots on the ground view and it's not a good combination."

With these circumstances as a backdrop, Brewer wrote that "it's getting harder to grow, and these giant REITs need big deals to move the needle. So I wouldn't be surprised if portfolio growth hits a soft patch. Or, worse, if any of these players stretch to keep numbers headed higher, their results could wind up weaker than expected."

Ventas' Q3 earnings call two weeks after the Brewer posting presented a generally upbeat picture, with the REIT narrowing and raising its full-year FFO guidance to between $4.43 and $4.46, representing 7% to 8% same-store growth over the prior year. However, company executives cited concerns about potential oversupply in about 30% of Ventas' seniors housing markets, notably Atlanta, although CFO Bob Probst said 70% of its seniors markets were "insulated" from such concerns.

In a report following the company's Q3 earnings call, Zacks Equity Research noted that Ventas beat the Zacks Consensus Estimate for normalized FFO by three cents per share. "Given the REIT's scale, diversified portfolio and healthy liquidity position, we expect it to gain from rising healthcare spending and an aging population," according to the Zacks report.

However, the Zacks report sounded a note of caution that could summarize near-term risks facing healthcare REITs more broadly. "With the fixed-rate nature of a substantial part of the company's revenues on one hand and rising cost of debt amid an increasing interest rate environment on the other, the company's profitability is expected to be adversely affected," according to the Zacks report. Additionally, "rising rates increase the cost of financing acquisitions, investment and development-activity costs, and also lowers the amount that third parties are ready to pay for the company's assets at disposal."

To learn more about the state of the healthcare real estate sector along with its opportunities and challenges, be sure to attend RealShare National Healthcare Real Estate, scheduled for Dec. 2 and 3 at the Westin Kierland Resort & Spa, Scottsdale, AZ. Click here for additional information and to register for the conference.