Core Viewpoint - The real estate sector is currently underperforming compared to the broader market, making it difficult to identify thriving Real Estate Investment Trusts (REITs) [1]. Group 1: Company Analysis - Welltower (WELL) is highlighted as a REIT that is managing to thrive despite the challenges faced by the real estate sector [1]. - The company is positioned as a potential investment opportunity for those seeking high-quality dividend stocks and long-term growth [1]. Group 2: Investment Strategy - A hybrid investment strategy combining classic dividend growth stocks, Business Development Companies, REITs, and Closed End Funds is suggested as an effective way to enhance investment income while achieving total returns comparable to traditional index funds [1]. - This approach aims to balance growth and income, allowing investors to capture total returns on par with the S&P 500 [1].

Core Insights - WELL Health Technologies Corp. has announced that its majority-owned subsidiary WELLSTAR Technologies Corp. has entered into agreements to complete a Series B funding round [1] Company Overview - WELL Health Technologies Corp. is a digital healthcare company focused on improving health outcomes by leveraging technology to empower healthcare practitioners and their patients globally [1]

Core Insights - Seven real estate stocks to watch include American Tower, Opendoor Technologies, Alexandria Real Estate Equities, Welltower, Blackstone, VICI Properties, and AGNC Investment, noted for their high trading volume recently [2] Company Summaries - **American Tower (AMT)**: A leading global REIT with over 224,000 communications sites and a significant presence in U.S. data center facilities [3] - **Opendoor Technologies (OPEN)**: Operates a digital platform for residential real estate transactions, offering services for homeowners to sell directly or list their homes [3] - **Alexandria Real Estate Equities (ARE)**: A life science REIT focused on collaborative life science and advanced technology campuses in key innovation areas [4] - **Welltower (WELL)**: A REIT transforming healthcare infrastructure by investing in seniors housing and health systems to enhance care delivery models [5] - **Blackstone (BX)**: An alternative asset management firm specializing in real estate and private equity, also providing capital markets services [6] - **VICI Properties (VICI)**: An experiential REIT with a portfolio of major gaming and hospitality destinations, including iconic Las Vegas properties [7] - **AGNC Investment (AGNC)**: A REIT investing in agency residential mortgage-backed securities, focusing on government-backed securities [7]

Core Insights - Welltower Inc. is a leading real estate investment trust (REIT) focused on healthcare infrastructure, particularly in senior housing and outpatient medical properties [1] Financial Strategy - The company has achieved a significant reduction in net debt to consolidated enterprise value from 13.1% to 7.6% over the past year [2][6] - Welltower successfully sourced over $4.1 billion in capital, including senior unsecured notes and equity issuances [2][6] - In August 2025, Welltower issued $400 million of 4.50% senior unsecured notes due 2030 and $600 million of 5.125% senior unsecured notes due 2035 [2] Operational Activities - In the third quarter, Welltower made pro rata gross investments totaling $1.9 billion, with $96 million allocated to development funding [3] - The company completed property dispositions and loan repayments amounting to $144 million [3] - Six development projects were completed with a total investment of $260 million [3] Acquisitions - In October 2025, Welltower acquired a real estate portfolio in the U.K. for approximately £5.2 billion, which includes 111 communities managed under a RIDEA structure [4] - Additionally, Welltower acquired 100% equity ownership of a portfolio operated by HC-One for £1.2 billion, including the repayment of an existing £660 million loan [4] - Total investments in acquisitions amounted to approximately £6.4 billion [6] Financial Performance - Welltower reported earnings per share of $1.34, exceeding the estimated $1.30 [5] - The company generated revenue of approximately $2.69 billion, slightly below the estimated $2.75 billion [5] - Despite a stock price decrease to $176.33, Welltower maintains a strong market capitalization of $117.78 billion [5] - The dividend yield stands at 1.56%, with a dividend per share of $2.75 and a payout ratio of 134.62% [5]

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]

Core Insights - Welltower Inc. reported third-quarter 2025 normalized funds from operations (FFO) per share of $1.34, exceeding the Zacks Consensus Estimate of $1.30, and reflecting a year-over-year increase of 20.7% [1][9] - The company achieved revenues of $2.69 billion, surpassing the Zacks Consensus Estimate of $2.65 billion, with a year-over-year growth of 30.6% [2] - Welltower increased its guidance for 2025 normalized FFO per share to a range of $5.24-$5.30, up from the previous range of $5.06-$5.14 [8][9] Financial Performance - The total portfolio same-store net operating income (SSNOI) grew by 14.5% year over year, driven by a 20.3% increase in the seniors housing operating (SHO) portfolio [3][9] - The SHO portfolio's same-store revenues rose by 9.7% year over year, supported by a 400 basis-point increase in average occupancy and a 4.8% growth in Revenue per Occupied Room (RevPOR) [3] Investments and Acquisitions - Welltower's pro-rata gross investments in the third quarter totaled $1.9 billion, which included $1.8 billion in acquisitions and loan funding [4] - In October 2025, Welltower acquired a real estate portfolio in the U.K. for nearly £5.2 billion operated by Barchester and 100% equity ownership of another portfolio operated by HC-One for £1.2 billion [2] Operating Expenses - Property operating expenses increased by 30% year over year to $1.58 billion [5] Balance Sheet and Liquidity - As of September 30, 2025, Welltower had $11.9 billion of available liquidity, which included $6.9 billion in cash and restricted cash, along with full capacity under its $5 billion line of credit [6] Dividend Information - Welltower announced a cash dividend of 74 cents per share for the third quarter of 2025, marking the company's 218th consecutive quarterly cash dividend payout [7] Future Development - The company expects to fund an additional $80 million of development in 2025 for ongoing projects as of September 30, 2025 [10]

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 ...