Company Reports

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. The baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Over the long term, the best healthcare companies are well positioned to benefit from these industry tailwinds.

Welltower has reported same-store net operating income growth of at least 4% every year for the past five years, accelerating to 8.5% in the second quarter of 2026.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Welltower reported normalized funds from operations of $1.60 per share and same-store net operating income growth of 15.5% for the second quarter.

Welltower reported normalized funds from operations of $1.47 per share and same-store net operating income growth of 16.4% for the first quarter.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Welltower reported normalized funds from operations of $1.45 per share and same-store net operating income growth of 15.0% for the fourth quarter.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Welltower reported normalized funds from operations of $1.34 per share and same-store net operating income growth of 14.5% for the third quarter.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Welltower reported normalized funds from operations of $1.28 per share and same-store net operating income growth of 13.8% for the second quarter.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is entering its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Welltower reported normalized funds from operations of $1.20 per share and same-store net operating income growth of 12.9% for the first quarter.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is starting to enter its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per person than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

No-moat Welltower reported fourth-quarter earnings that were slightly better than our expectations, leading us to reaffirm our $125 fair value estimate. Senior housing same-store occupancy increased 120 basis points sequentially to 87.1%, bringing the occupancy level back in line with the level reported in the first quarter of 2020. Rental rates were up 4.9% year over year, leading to same-store revenue growth of 8.8%. Meanwhile, same-store operating expenses only increased 4.1%, leading to same-store net operating income growth of 23.9%, slightly higher than our estimate of 19.4% growth in the fourth quarter. Additionally, the triple-net senior housing portfolio saw 5.1% same-store NOI growth, the medical office portfolio saw 2.0% same-store NOI growth, and the skilled nursing portfolio saw 2.6% same-store NOI growth. Combined, total company same-store NOI growth was 12.8%, slightly better than our estimate of 10.1% growth. Welltower reported normalized funds from operations of $1.13 per share in the quarter, which, while it was 17.7% higher than the $0.96 figure the company reported in the fourth quarter of 2023, was a penny below our $1.14 estimate.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is starting to enter its senior years, and the 80-and-older population, which spends more than four times on healthcare per capita than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.

Over the past few years, we have observed an inverse relationship between share prices in the REIT sector and interest-rate movements. We believe a major reason is that all commercial real estate valuations are connected to interest rates. Capitalization rates directly indicate the return expectations for a real estate investment and expectations for risk and growth. Historically, we have observed that commercial real trades at cap rates consistently spread above the 10-year US Treasury. If interest rates rise, investors will require a higher return, and thus a higher cap rate, to accept the risk associated with an investment in a real estate asset. Since return expectations have held relatively steady for most real estate sectors over the past few years, higher cap rates translate to falling prices for real estate.

Third-quarter results for no-moat Welltower were slightly better than our expectations, and the company has executed on several significant transactions, leading us to raise our fair value estimate to $123 from $107. Senior housing same-store occupancy improved 120 basis points sequentially to 85.9%, slightly better than our estimate of a 90-basis-point gain. Combined with rental rates being up 5.0% year over year, senior housing same-store revenue was up 8.9% year over year in the third quarter. Meanwhile, same-store operating expenses were only up 4.6%, leading to same-store net operating income growth of 23.0% for the segment, which was better than our estimate of 18.2% growth and is the eighth straight quarter above 20%. The triple-net senior housing segment saw 5.8% same-store NOI growth, skilled nursing saw 3.0% growth, and medical office saw 2.2% growth. Combined, Welltower reported same-store NOI growth for the whole company of 12.6% in the third quarter, better than our estimate of 9.0% growth. As a result, Welltower reported normalized funds from operations of $1.11, better than our $1.08 estimate.

The top healthcare real estate stands to disproportionately benefit from the Affordable Care Act. There is an increased focus on higher-quality care in lower-cost settings. The best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is starting to enter its senior years, and the 80-and-older population, which spends more than 4 times on healthcare per capita than the national average, should almost double over the next 10 years. Long term, the best healthcare companies are well positioned to take advantage of these industry tailwinds.