Welltower Ups Guidance, Reflecting Rate Growth and Occupancy Gains

Welltower (NYSE: WELL) has updated its annual guidance, a sign that the real estate investment trust has a more rosy view of the senior living industry’s recovery.

In a business update issued Tuesday, Welltower reported it now expects to achieve normalized funds from operations (NFFO) in a range of $3.43 to $3.56 per diluted share in the second quarter of 2023, compared to previous guidance of $3.39 to $3.54 per diluted share that was issued on May 2.

The increase, the Welltower business update shows, stems from “continued strength in seniors housing operating fundamentals and recent capital activity.”


Welltower also raised its 2023 net income attributable to common stockholders guidance range to $0.61 to $0.74 per diluted share as compared to past guidance of $0.57 and $0.72.

The improved guidance comes as Welltower reported “better than anticipated” revenue generation and expense trends. Also, Welltower reported that improvement in full-time hiring and continued reduction of agency labor resulted in “lower than expected compensation expenses,” according to the revised business update.

“Sustained rate growth and occupancy gains have driven revenue ahead of expectations,” the update states. “Continued improvement in full-time employee hiring trends and reduction in agency usage have resulted in lower-than-expected compensation expense.”


The Toledo, Ohio-based REIT previously reported total portfolio NOI growth of 11% compared with the first quarter in 2022, and saw net operating income (NOI) growth of 23.4% in the first quarter of this year. Welltower expects future margin expansion opportunities will be driven by robust rate growth and normalization of the expense environment.

Same-store revenue for the company’s senior living segment increased 10% in the first quarter versus the same period in 2022. That was driven by a 240-basis point increase of year-over-year occupancy growth and revenue per occupied room (RevPOR) growth of 6.8%.

This cadence of rising revenue and occupancy could be a sign that the wider senior living industry, this comes as the company’s capital deployment pipeline was “robust with opportunities,” CEO Shankh Mitra

In Q123, Welltower made $785 million in gross investments, which included $529 million in acquisitions and loan funding and $257 million in development funding, having opened four development projects for an aggregate investment of $57 million. Loan payoffs and dispositions were made to the tune of $92 million.

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