Welltower (NYSE:WELL) reported third-quarter results marked by higher senior housing revenue, expanding margins and increased investment activity, while raising the midpoint of its full-year normalized funds-from-operations outlook.
The real estate investment trust reported net income attributable to common stockholders of $0.54 per diluted share and normalized FFO of $1.67 per diluted share, up 24.6% from a year earlier. Total portfolio same-store net operating income increased 15.8%, led by 21% growth in the company’s Seniors Housing Operating, or SHOP, portfolio.
Chief Executive Officer Shankh Mitra said revenue rose 38% and adjusted EBITDA increased 35% during the quarter. The company raised the midpoint of its full-year normalized FFO guidance by $0.10 per share to $6.50, which would represent 22.9% growth from 2025 if achieved.
Senior Housing Results Drive Growth
Welltower’s SHOP portfolio, which now accounts for 70% of total same-store NOI, generated 9.1% organic revenue growth. The company cited occupancy gains and stronger pricing as the principal drivers.
Average occupancy increased 120 basis points sequentially from the second quarter, according to Mitra, while RevPOR, or revenue per occupied room, rose 5.3%. In the U.S., where occupancy surpassed 90%, RevPOR grew 5.5%. The company’s traditional senior living business posted RevPOR growth of 5.8%.
Chief Operating Officer and Vice Chairman John Burkart said communities with occupancy above 90%, representing nearly two-thirds of the portfolio, generated RevPOR growth exceeding 6%. He said the company is seeing a transition in which pricing increasingly contributes to growth as communities fill up.
Operating expenses in the SHOP portfolio increased 4.3% year over year, while expense per occupied room rose less than 1%, according to management. The difference between revenue and expense growth contributed to a 300-basis-point margin expansion. SHOP’s same-store NOI margin reached 31.7%, up 310 basis points from a year earlier, and its flow-through margin reached 66%, a post-COVID high for the company.
Management attributed expense performance partly to operating leverage, subdued wage growth, improved labor availability and initiatives under the Welltower Business System, its technology and operating platform. Burkart said compensation per occupied room increased 90 basis points.
Investment Activity Reaches $21 Billion Year to Date
Welltower said it had completed or announced more than $21 billion of investment activity year to date, including $13.3 billion closed through the end of the third quarter. The company completed more than 30 transactions totaling $3.8 billion during the quarter, with a median transaction size of $38 million.
Mitra said Welltower had completed 196 granular transactions during the year, with a median size of $35.5 million. He said the company focuses on off-market transactions and post-closing operational opportunities rather than large-scale mergers and acquisitions.
Chief Investment Officer and Co-President Nikhil Chaudhri said roughly 70% of third-quarter activity involved 43 SHOP communities. The acquired communities averaged four years in age, more than 160 units and 66% occupancy. They had blended RevPOR above $10,000 per month and were acquired at an estimated 10% to 15% discount to replacement cost, he said.
Welltower has another $7.7 billion of investment activity across 50 transactions that it is working to close. About 85% of that pipeline was sourced off-market, while more than half involves sellers accepting some proceeds in Welltower operating partnership units, Chaudhri said.
The company also acquired roughly $850 million of skilled nursing facilities across eight off-market transactions during the quarter. Chaudhri said skilled nursing rent yields have generally been around 9% and pointed to financing constraints for some owners as a developing source of opportunities.
Chaudhri also said Genesis HealthCare completed its Chapter 11 process and Welltower received full repayment of $130 million of senior secured term loans. He said the company’s investment return associated with Genesis, including interim and final payments, was nearly 9% since 2011.
Capital Position and Updated Outlook
Co-President and Chief Financial Officer Tim McHugh said Welltower raised $4.4 billion of capital during the quarter, including $3.1 billion through share issuance and OP unit funding, $480 million from capital recycling and $835 million through a return to the Canadian unsecured debt market.
The company also retired more than $600 million of debt and ended the quarter with $2.4 billion of cash. Net debt to adjusted EBITDA was 3.02 times. Welltower said its available cash, recent capital activity and approximately $1.9 billion of expected dispositions position it to fund about $7.7 billion of incremental investment activity.
For 2026, Welltower now expects normalized FFO of $6.47 to $6.53 per diluted share and net income attributable to common stockholders of $3.31 to $3.37 per diluted share. Its updated outlook assumes total portfolio same-store NOI growth of 15% to 16.25%, including SHOP NOI growth of 20.25% to 21.75%.
The SHOP outlook assumes 9.3% revenue growth, driven by 5.1% RevPOR growth and 350 basis points of year-over-year occupancy growth, alongside 4.6% expense growth.
Management said it continues to selectively dispose of assets that it believes will not contribute as strongly to future growth. Welltower has completed $6 billion of dispositions this year, including continuing sales of outpatient medical office assets. Mitra said the company’s long-term focus remains on per-share cash flow growth from its existing portfolio, technology investments and differentiated senior housing operations.
About Welltower (NYSE:WELL)
Welltower Inc (NYSE: WELL) is a healthcare-focused real estate investment trust that owns, develops, and manages properties used to provide healthcare and related services. Its portfolio is centered on senior housing communities, outpatient medical facilities, and post-acute care properties, including assets operated by healthcare providers and senior living companies.
The company’s senior housing investments support independent living, assisted living, and memory care services. Its outpatient medical properties accommodate physicians, clinics, and other healthcare providers, while its broader healthcare real estate portfolio is designed to serve demand for care delivered outside traditional hospitals.
