• Normalized FFO per Share: Increased 18% year-over-year.
• Same-Store NOI Growth: Nearly 24% in the senior housing operating portfolio for Q4.
• Occupancy Growth: Average same-store occupancy growth of 120 basis points sequentially and 310 basis points year-over-year.
• Revenue Growth: 23% for the full year of 2024.
• EBITDA Growth: 26% for the full year of 2024.
• FFO per Share Growth: Nearly 20% for the full year of 2024.
• Operating Margin Expansion: 320 basis points in the senior housing operating portfolio.
• Transaction Activity: $2.2 billion of transactions closed in Q4.
• Net Debt to Adjusted EBITDA: Reduced to 3.5 times.
• Cash on Hand: Ended the quarter with $3.7 billion of cash and restricted cash.
• 2025 Guidance for Normalized FFO: $4.79 to $4.95 per diluted share.
• 2025 Same-Store NOI Growth Estimate: 9.25% to 13% for the total portfolio.

• Warning! GuruFocus has detected 10 Warning Signs with WELL.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Welltower Inc (NYSE:WELL) reported a strong Q4 2024 with normalized FFO per share increasing 18% year-over-year.
• The senior housing operating portfolio achieved nearly 24% same-store NOI growth, marking the ninth consecutive quarter of over 20% growth.
• The company closed $2.2 billion of transactions in Q4 2024 at attractive economics, contributing to a 23% revenue growth for the year.
• Welltower Inc (NYSE:WELL) has a robust pipeline with $2 billion of investments under contract for 2025, indicating strong capital deployment opportunities.
• The company has significantly deleveraged its balance sheet, reducing net debt to adjusted EBITDA to 3.5 times, enhancing its financial flexibility.

Negative Points

• The US commercial real estate debt market faces significant headwinds with substantial maturities in 2025, posing potential challenges.
• Higher long-term interest rates are impacting refinancing efforts, particularly for regional banks, which could affect Welltower Inc (NYSE:WELL)'s financing environment.
• The company faces ongoing challenges in the labor market, with labor costs comprising a significant portion of expenses.
• Welltower Inc (NYSE:WELL) anticipates higher operating expenses in the UK due to increased employment taxes and minimum wage hikes.
• The rollout of the tech platform across the portfolio is expected to take several years, potentially delaying some operational efficiencies.

Q & A Highlights

Q: Can you provide a sense of the pricing power across occupancy bands within the Senior Housing Operating (SHO) portfolio and details on the $2 billion in acquisitions? A: (Shankh Mitra, CEO) Assets that are 90-plus percent occupied have RevPOR growth well into the sixes, while those below 70% are roughly flat. (Nikhil Chaudhri, CIO) The $2 billion in acquisitions are similar to past metrics, with low 80s occupancy and newer vintage assets.

Q: How does the current development cycle impact your ability to acquire properties with lease-up potential? A: (Nikhil Chaudhri, CIO) Despite fewer deliveries, we continue to find under-operating buildings with room for optimization. The massive delivery cycle post-GFC provides opportunities as many need liquidity assistance.

Q: How do you approach retaining talent, and is there a retention problem at Welltower? A: (Shankh Mitra, CEO) Retaining talent is a top priority, and there is no retention problem at Welltower. We focus on building trust and shared purpose, ensuring our team is fully committed and aligned with our goals.

Q: Can you discuss the private funds management business and its targeted IRRs? A: (Shankh Mitra, CEO) We have no additional details to share on the private capital business at this time. We focus on unstabilized assets for growth, and the private capital business will expand our total addressable market.

Q: What is the outlook for senior housing development given the strong fundamentals and demand visibility? A: (Shankh Mitra, CEO) Development is driven by economic viability. Many misunderstand development profit, focusing on trended yields rather than untrended yields. We caution against relying on external capital without understanding the full economic picture.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.