Introduction & Market Context
Welltower Inc. (NYSE:WELL) delivered a strong business update in its April 2025 presentation, highlighting robust financial performance amid favorable demographic trends in the senior housing sector. The real estate investment trust, which specializes in healthcare infrastructure, continues to benefit from increasing demand for senior housing as the 80+ population expands, coupled with constrained new supply.
The company’s shares were trading up 1.42% at $149.05 at the previous close, with premarket activity showing a further 1.98% increase to $152.00, reflecting positive market reception to the company’s results and outlook.
Q1 2025 Performance Highlights
Welltower reported impressive first-quarter results, with funds from operations (FFO) per diluted share growing 19% year-over-year. This strong performance led management to increase its full-year FFO guidance range to $4.97 per diluted share. Net Operating Income (NOI) grew by 21.7%, with margin expansion of 290 basis points, demonstrating the company’s operational efficiency.
As shown in the following key highlights from the first quarter:
The company achieved its strongest sequential first-quarter occupancy gain in its history, despite typical seasonal headwinds. Year-over-year occupancy gains were substantial, with March 2025 showing a 400 basis point improvement compared to March 2024. This occupancy growth, combined with favorable unit economics where revenue per occupied room (RevPOR) consistently outpaced expense per occupied room (ExpPOR), drove the significant margin expansion.
The following chart illustrates how these favorable unit economics contributed to margin improvement:
Strategic Acquisitions and Partnerships
Welltower’s growth strategy continues to focus on strategic acquisitions and operator partnerships. Year-to-date investment activity reached $6.2 billion, building on the company’s track record of $22.1 billion in investments across 240 transactions since Q4 2020.
A standout transaction is the acquisition of Amica Senior Lifestyles from Ontario Teachers’ Pension Plan for C$4.6 billion. This portfolio includes 31 in-place properties, 7 properties under construction, and 9 development parcels, positioned in supply-constrained and affluent neighborhoods across Canada.
The following executive summary details the Amica acquisition:
The company highlighted several successful operator partnerships driving portfolio outperformance. The case study with Legend Senior Living demonstrated significant value creation, with annualized NOI increasing by $39 million since converting from a triple-net to a RIDEA structure in 2022, representing a 2.4x increase from Q1 2022 to Q1 2025.
As shown in the following performance improvement metrics:
Another successful partnership with Legend resulted in substantial occupancy improvements across recently acquired properties:
Similarly, Welltower’s partnership with Cogir Management has driven outperformance in the Canadian market:
Balance Sheet Strength and Capital Allocation
Welltower’s financial position remains strong, with net debt to Adjusted EBITDA of 3.3x and nearly $9.0 billion of total near-term liquidity. The company received credit rating upgrades from both S&P Global Ratings and Moody’s Investor Service to "A-" and "A3" respectively, reflecting its improved financial profile.
The following slide details the company’s balance sheet and liquidity position:
Welltower’s capital allocation strategy leverages its access to multiple capital sources, including $27 billion in public equity, $19 billion in debt, and $4 billion in private capital. This plurality of capital sources provides the company with a competitive advantage in executing its acquisition strategy, particularly in a market where traditional debt financing has become more constrained.
Industry Outlook and Growth Drivers
The senior housing sector is positioned for multi-year growth, driven by accelerating population growth among those aged 80 and above, which is expected to increase at a 4.8% CAGR. This demographic tailwind coincides with diminishing new supply and improved affordability, creating a compelling backdrop for revenue growth.
The following chart illustrates these favorable industry dynamics:
Construction starts for new senior housing have declined significantly, now at levels comparable to those seen during the Global Financial Crisis. This supply-demand imbalance is expected to support sustained occupancy growth in 2025 and beyond:
The company also highlighted how its in-place portfolio is on a path to recovery, with nearly 40% of the SHO portfolio having surpassed pre-COVID levels:
Forward-Looking Guidance
Based on its strong first-quarter performance, Welltower increased its full-year 2025 guidance. The company now expects same-store NOI growth of 10.0%-13.25% for its total portfolio, with the Seniors Housing Operating portfolio projected to grow between 16.5%-21.5%.
The guidance increase reflects outperformance in the Seniors Housing Operating portfolio and robust capital deployment:
Welltower’s outlook remains positive, supported by favorable demographic trends, constrained new supply, and its strategic positioning with best-in-class operators. The company’s "value creation flywheel" combines data science capabilities, the Welltower Business System, and capital allocation expertise to drive sustainable shareholder value.
This approach, coupled with the unprecedented external growth opportunity in senior housing, positions Welltower to continue its strong performance trajectory through 2025 and beyond.
Full presentation:
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