Performance Overview - Baron Real Estate Income Fund increased by 5.43% in Q3 2025, outperforming the MSCI US REIT Index which rose by 4.49% [2] - Since inception on December 29, 2017, the Fund's cumulative return is 97.17%, significantly higher than the REIT Index's 41.54% [2][3] Comparative Rankings - As of September 30, 2025, the Fund ranks in the 2nd, 5th, 17th, and 2nd percentiles for the 1-, 3-, 5-year, and since inception periods, respectively, according to Morningstar [4] - The Fund's Institutional Share Class is ranked as the 3rd, 10th, 28th, and 2nd best performing share class in its category for the same periods [4] Market Outlook - The Fund remains optimistic about public real estate prospects, expecting improving business fundamentals and values to contribute to attractive returns [9] - Positive comments from executives of leading real estate companies indicate a potential improvement in real estate fundamentals [12][13][14][15][16] Investment Strategy - The Fund's portfolio consists of 75% REITs, 22% non-REIT real estate companies, and 3.1% cash and cash equivalents as of September 30, 2025 [21] - The Fund's investment approach includes a focus on both REITs and non-REIT real estate companies, allowing for flexibility in capitalizing on market opportunities [20] Sector Analysis - Industrial REITs represent the largest exposure in the Fund, with a positive outlook driven by demand/supply dynamics and e-commerce growth [23] - Health Care REITs and senior housing are expected to benefit from favorable demographic trends and improving fundamentals [27] - The Fund maintains a cautious but optimistic view on office REITs, identifying specific markets with potential for growth [27] Recent Activity - The Fund initiated positions in Jones Lang LaSalle Incorporated and increased holdings in Prologis, Inc. and The Macerich Company during Q3 2025 [44][46][47] - The Fund trimmed its exposure to certain holdings like American Tower Corporation and Equinix, Inc. due to market conditions and growth outlooks [41][49] Future Prospects - The Fund anticipates a pivotal moment for real estate, with expectations of solid growth in business fundamentals and potential for improved valuations [54] - The overall sentiment in the real estate market is cautiously optimistic, with expectations of continued demand exceeding supply [51]

Key Takeaways Welltower's Q3 FFO of $1.34 beat estimates and rose 20.7% year over year on strong revenue growth.Total portfolio SSNOI climbed 14.5%, driven by 20.3% SSNOI growth in the seniors housing operating portfolio.Welltower lifted its 2025 FFO per share guidance range to $5.24-$5.30.Welltower Inc.’s (WELL) third-quarter 2025 normalized funds from operations (FFO) per share of $1.34 surpassed the Zacks Consensus Estimate of $1.30. The reported figure improved 20.7% year over year.Results reflect a ris ...

Financial Data and Key Metrics Changes - Welltower reported a net income attributable to common stockholders of $0.41 per diluted share and normalized funds from operations (FFO) of $1.34 per diluted share, representing a year-over-year growth of 20.7% [23] - The total portfolio same-store net operating income (NOI) growth was 14.5% year-over-year [23] - Year-over-year organic revenue growth remained at approximately 10%, driven by a 400 basis point occupancy gain and strong pricing power [13] Business Line Data and Key Metrics Changes - The senior housing portfolio achieved same-store NOI growth exceeding 20% for the 12th consecutive quarter, marking an exceptional performance [12] - Operating margins across the same-store portfolio increased by 260 basis points, with growth in unit revenue (RevPor) outpacing unit expense growth (ExPor) [13] - The seniors housing triple-net portfolio's same-store NOI increased by 3.1% year-over-year, with trailing 12-month EBITDA coverage at 1.21x [24] Market Data and Key Metrics Changes - The U.K. portfolio saw a 550 basis point year-over-year increase in occupancy, leading to a 10.4% revenue increase [13] - The backdrop for growth in 2026 and beyond remains favorable, with senior housing demand expected to grow stronger while supply remains dormant [14] Company Strategy and Development Direction - Welltower is transitioning to a pure-play rental housing platform for the aging population, focusing on technology-driven transformation and operational excellence [5][14] - The company is exiting the outpatient property management business to concentrate on senior living, which is seen as a high-growth opportunity [6][14] - The launch of Welltower 3.0 emphasizes operations and technology, aiming to enhance customer experience and employee satisfaction [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning and the potential for significant growth and cash flow compounding over time [44] - The company is focused on aligning interests across its ecosystem to enhance long-term value creation [43] - Management acknowledged the uncertainty in the broader economy but highlighted the strength of their business model driven by needs-based and private pay nature [11] Other Important Information - Welltower's year-to-date transaction activity reached $33 billion, with $23 billion in incremental transactions reported [5][16] - The company announced the acquisition of the Barchester Senior Living portfolio for $5.2 billion, which is expected to be accretive to FFO per share in 2026 [9][20] - A new compensation plan was introduced to align management and operating partners' interests with shareholders [36] Q&A Session Summary Question: What is the goal behind the changes and how should growth be viewed? - Management clarified that the focus is on aligning interests across the ecosystem rather than proving anything, emphasizing the importance of duration in growth [43][44] Question: Was the new compensation plan presented as a team package? - The board spent significant time developing the plan, which aligns with the company's incentive design principles [48] Question: Why not issue equity for acquisitions instead of asset sales? - Management explained that the cost of equity was viewed as higher than the cost of asset sales, emphasizing long-term value creation over short-term gains [52][54] Question: How do the new care home deals compare to the current portfolio? - The new portfolios are similar in asset quality and private pay percentage, maintaining a consistent growth outlook [56] Question: How is execution risk managed for the announced changes? - Management highlighted the importance of a strong team with extensive transaction experience and a focus on attracting and retaining top talent to mitigate risks [76]

Welltower (NYSE:WELL) Q3 2025 Earnings Call October 28, 2025 09:00 AM ET Speaker4Thank you for standing by. At this time, I would like to welcome everyone to today's Welltower Third Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. If you'd like to ...

Financial Performance - For the nine months ended September 30, 2025, resident fees and services and rental income represented 77% and 19% of total revenues, respectively [183]. - For the three months ended September 30, 2025, net income was $282,186 thousand, a decrease of 7.3% from $304,618 thousand in the previous quarter [195]. - Funds from Operations (FFO) for the same period was $824,375 thousand, remaining relatively stable compared to $825,717 thousand in the prior quarter [195]. - Net income for the three months ended September 30, 2025, was $282,186,000, a decrease of 38% compared to $456,800,000 in the same period of 2024 [225]. - Funds from Operations (FFO) increased by 30% to $824,375,000 for the three months ended September 30, 2025, compared to $635,817,000 in 2024 [225]. - Consolidated Net Operating Income (NOI) for the nine months ended September 30, 2025, was $3,102,874, up 33.7% from $2,319,377 in 2024 [257]. - Net income attributable to common stockholders for the nine months ended September 30, 2025, was $840,404, compared to $831,709 for the same period in 2024, reflecting a slight increase of 0.83% [256]. Property Acquisitions and Sales - Welltower completed property acquisitions totaling $5.28 billion across 239 properties, with an average capitalization rate of 7.1% [188]. - A definitive agreement was announced to acquire a portfolio of 38 seniors housing communities for C$4.6 billion, expected to close in early 2026 [189]. - Subsequent to September 30, 2025, Welltower entered into agreements to acquire a U.K. portfolio of seniors housing real estate for £5.2 billion and the HC-One Group portfolio for £1.2 billion [190]. - A definitive agreement was made to sell a portfolio of 319 outpatient medical properties for approximately $7.2 billion, with net proceeds expected to be around $6.0 billion [196]. Debt and Liquidity - The company extinguished $288.5 million of secured debt at an average interest rate of 5.37% and assumed $469.1 million of secured debt at an average interest rate of 4.45% during the nine months ended September 30, 2025 [187]. - As of September 30, 2025, Welltower had $6.81 billion in cash and cash equivalents and $5 billion in available borrowing capacity under its unsecured revolving credit facility [186]. - The company maintains sufficient liquidity to fund its cash uses for the next twelve months, supported by various sources including resident fees and investment dispositions [201]. - The company plans to manage its capital structure to maintain compliance with debt covenants and mitigate risks associated with potential downgrades in credit ratings [213]. - The net debt to book capitalization ratio improved to 20% as of September 30, 2025, down from 24% in the previous quarter [197]. Revenue and Income Growth - Total revenues for the Seniors Housing Operating segment increased by 37% to $2,070,115,000 for the three months ended September 30, 2025, compared to $1,514,022,000 in 2024 [226]. - Average occupancy in the Seniors Housing Operating segment increased to 86.9% as of September 30, 2025, up from 83.8% in the same period of 2024 [226]. - Total revenues for the Triple-net segment increased by 25% to $286,637,000 for the three months ended September 30, 2025, compared to $228,649,000 for the same period in 2024 [232]. - Rental income for the Triple-net segment rose by 26% to $286,353,000 for the three months ended September 30, 2025, up from $227,531,000 in the prior year [232]. Operational Metrics - The property mix for Seniors Housing Operating increased to 57% in Q3 2025, compared to 51% in Q3 2024 [198]. - Operating lease expirations indicate that 68.4% of base rent is due thereafter, highlighting long-term revenue stability [199]. - The company recorded impairment charges of $36,922,000 related to nine properties during the nine months ended September 30, 2025, compared to $65,996,000 for 14 properties in the same period of 2024 [227]. - The company completed 22 construction projects with an anticipated remaining funding of $430,287,000 as of September 30, 2025 [229]. Shareholder Returns - The company declared a cash dividend of $0.74 per share for the quarter ended September 30, 2025, marking the 218th consecutive quarterly cash dividend [192]. - The company has a Stock Repurchase Program approved for up to $3,000,000,000 of common stock, with no shares repurchased during the three months ended September 30, 2025 [286]. Market and Economic Factors - The company is exposed to currency fluctuations, with a potential impact of less than $28,000,000 on annualized net income from a 10% change in exchange rates for investments in Canada and the UK [276]. - A 1% increase in interest rates would result in an increased annual interest expense of $20,550,000 for variable rate debt outstanding of $2,055,045,000 as of September 30, 2025 [275].

October 27, 2025 Forward Looking Statements and Risk Factors This document contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "pro forma," "estimate" or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. These statements include, among others, management's expectations regard ...

Core Insights - Welltower reported a revenue of $2.69 billion for the quarter ended September 2025, marking a 30.7% increase year-over-year, with an EPS of $1.34 compared to $0.73 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $2.65 billion, resulting in a surprise of +1.36%, while the EPS also surpassed the consensus estimate of $1.30 by +3.08% [1] Revenue Breakdown - Interest income was reported at $67.22 million, slightly above the average estimate of $66.07 million, reflecting a year-over-year decline of -2.7% [4] - Other income reached $57.63 million, significantly exceeding the average estimate of $39.93 million, with a year-over-year increase of +29.2% [4] - Rental income amounted to $499.48 million, surpassing the average estimate of $473.42 million, showing a year-over-year growth of +16% [4] - Resident fees and services generated $2.06 billion, slightly above the average estimate of $2.05 billion, with a year-over-year increase of +36.4% [4] Stock Performance - Over the past month, Welltower's shares have returned +1.7%, compared to a +2.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Welltower reported quarterly funds from operations (FFO) of $1.34 per share, exceeding the Zacks Consensus Estimate of $1.3 per share, and up from $1.11 per share a year ago [1][2] - The company achieved revenues of $2.69 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.36%, compared to $2.06 billion in the same quarter last year [3] - Welltower's stock has increased by approximately 41.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.5% [4] Financial Performance - The FFO surprise for the recent quarter was +3.08%, and the company has consistently surpassed consensus FFO estimates over the last four quarters [2] - The current consensus FFO estimate for the upcoming quarter is $1.34, with projected revenues of $2.71 billion, and for the current fiscal year, the estimate is $5.12 on revenues of $10.27 billion [8] Market Outlook - The estimate revisions trend for Welltower was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [7] - The REIT and Equity Trust - Other industry is currently ranked in the top 28% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [9]

Market Performance - Major U.S. stock indices, including the S&P 500, Nasdaq, and Dow Jones, closed at record highs for the second consecutive day, reflecting robust market performance [2][9] - The Dow Jones surged 324 points, or 0.69%, closing at 47,531.10, while the Nasdaq climbed 439 points, or 1.89%, reaching 23,644.20, and the S&P 500 advanced 83.72 points, or 1.23%, closing at 6,875.41 [2][9] Corporate Earnings - Cadence Design Systems (CDNS) reported strong Q3 results with adjusted earnings per share of $1.93, exceeding analyst estimates of $1.79, and revenue of $1.34 billion, surpassing expectations of $1.32 billion [3][9] - NXP Semiconductors (NXP) presented a mixed Q3 earnings report, with reported EPS of $2.48 lower than last year's $2.79, while revenue of $3.17 billion slightly exceeded the estimated $3.16 billion [4][9] - Welltower (WELL) announced solid Q3 results, with rental income reaching $499.48 million and declared a dividend of $0.74 per share, reaffirming its full-year adjusted FFO per share guidance between $5.24 and $5.30 [5][9] Strategic Developments - IBM (IBM) launched a new platform aimed at supporting financial institutions in navigating the evolving digital asset economy, positioning itself to capitalize on the growing interest in blockchain and digital currencies [6][9]

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...