Welltower spent $2.7 billion on senior housing in one quarter

Welltower closed $2.7 billion of acquisitions across 43 senior housing communities in the third quarter, part of $4.1 billion it invested in the period ^[1]. Counting deals closed since Sept. 30 or under contract, the Toledo, Ohio, REIT has $21.0 billion of investments lined up for 2026 ^[1].

CEO Shankh Mitra said the company buys fewer than 3% of the properties it screens and avoids large-scale M&A “like the plague” ^[2]. Its third-quarter purchases were in markets that included Naples, Florida, Denver, San Jose and Los Angeles ^[3].

Income from Welltower’s senior housing communities grew 21% in a year

Same-store net operating income in the senior housing operating portfolio rose 21.0%, while outpatient medical buildings grew 2.4% ^[1]. Average occupancy in that portfolio rose 3.2 percentage points from a year earlier, and revenue per occupied room increased 5.3% to $6,066 ^[1].

Normalized FFO came in at $1.67 a share, up 24.6%, and Welltower raised its full-year range to $6.47 to $6.53 from $6.36 to $6.44 ^[1]. It also declared a quarterly dividend of $0.85, up from $0.74 a year earlier ^[1].

Welltower is selling smaller buildings while it buys larger ones

Welltower sold 25 outpatient medical buildings for $139 million and seven senior housing properties for $145 million in the quarter ^[1]. In October, Brookdale Senior Living bought 30 communities it had been leasing from Welltower for $290 million ^[2][3].

By our math, Brookdale paid about $9.7 million per community, while Welltower’s third-quarter purchases averaged about $62.8 million each ^[1][2]. Welltower expects about $1.9 billion more in property sales and loan repayments over the next 12 months at a blended 6.5% yield ^[1].

Co-president and chief investment officer Nikhil Chaudhri said most owners with maturing senior housing debt will sell rather than recapitalize, and added, “That is where Welltower comes in” ^[2]. About $8 billion of U.S. senior housing debt comes due in 2026, according to Commercial Observer’s report on the call ^[2].

How to use this

For owners and developers of senior housing

1. Ask your lender for a written extension quote now if your loan matures in 2026 or 2027. With about $8 billion of senior housing debt due this year ^[2], Welltower expects owners to sell, and an owner with a signed extension can negotiate a sale without a deadline.
2. Compare your revenue per occupied room with Welltower’s $6,066 before you market a community ^[1]. A buyer that purchases fewer than 3 of every 100 properties it screens ^[2] is likely to ask for that comparison, so have 12 months of occupancy and rate history ready.
3. Use Brookdale’s purchase as a pricing reference for older leased communities. At about $9.7 million per community ^[2], it sits far below Welltower’s average purchase price, so ask a broker which of the two groups your building belongs to.

For investors in senior housing REITs and private funds

1. Ask any fund to report operating senior housing separately from outpatient medical. Welltower’s operating portfolio grew income 21.0% while outpatient grew 2.4% ^[1], and a blended number can hide which part produces the growth.
2. Ask private sponsors how they plan to refinance or sell. Welltower has about $9.5 billion of available liquidity and net debt of 3.02 times adjusted EBITDA ^[1], and a sponsor bidding against that balance sheet for the same buildings should put its exit plan in writing.
3. Check payout ratios when you compare income. Welltower paid out 51% of normalized FFO as dividends last quarter ^[1], which leaves it cash to keep buying.