Welltower (NYSE: WELL) in the second quarter of 2025 grew same-store NOI by 23.4% in its senior housing operating portfolio, marking 11 consecutive quarters with senior living NOI growth at or above 20%.
At the same time, the company reported normalized funds from operations (FFO) per share in the quarter of $1.28, prompting the Toledo, Ohio-based real estate investment trust (REIT) to increase its FFO guidance for the year to $5.10, up from $4.97 previously.
The REIT also surpassed two other milestones in the quarter as net operating income for its senior housing operating portfolio (SHOP) assets surpassed $2 billion and overall company revenue exceeded $10 billion for the first time in its history.
Welltower has aggressively invested in senior living properties in 2025, with a $9.2 billion acquisition pipeline of “highly attractive” properties across all of its regions, including in the U.S. and abroad according to CEO Shankh Mitra.
Positive operating and financial results drove the strong quarter for Welltower, he added. The company has ironed out some previous trouble spots giving him more confidence of the road ahead, including the Holiday by Atria portfolio that Welltower transitioned to six other operators last year in a strategy centered on dividing up the portfolio into regional clusters.
Welltower brought on the former Holiday properties in 2021 in an acquisition valued at $1.58 billion and made in conjunction with operator Atria. But that acquisition represents “a failure so far, and our biggest disappointment over the past decade,” Mitra noted during Tuesday’s earnings call.
“We have increasing conviction that our initial execution plan and structuring was flawed,” he said.
Welltower has 1,309 properties in its SHO segment, and 303 communities under triple-net leases.
Welltower’s stock price rose to $165.96 by the time trading ceased Tuesday, up 4.9% from the previous market close.
Welltower’s portfolio pivots and growth
Last year, Welltower transitioned its 89-property Holiday by Atria portfolio to six operators that included Arrow Senior Living, Cogir, Discovery Senior Living, QSL, Sagora and StoryPoint.
Transitioning the former Atria properties to other operators “was not an easy feat, given the size of the portfolio, geographic disruption, and the challenge in hand in any operating operator transition, coupled with the value-add nature of the original business plan,” Mitra said.
After transitioning the portfolio from Atria to other operators, the REIT reorganized community management and sales efforts at the regional level, renovated common areas and units to improve resident satisfaction and refined the pricing strategy for communities to better fit local trends and amenity-based attributes.
Welltower’s improvements have already helped its operating partners grow occupancy for the portfolio by 560 basis points since the start of 2025. Based on the early results, Mitra is optimistic about the portfolio’s NOI “turning the corner” by the fourth quarter.
“While we have a long way to go, we’re encouraged by the early results,” he added.
Welltower has sold $16 billion in assets over the past decade, and Welltower’s investment pipeline this year has already exceeded the company’s entire acquisition slate for 2024, when the company invested $7 billion in acquisitions, according to Nikhil Chaudhri, co-president and chief investment officer. The company’s current investment totals are its highest-ever, he said.
The current $9.2 billion allocated for investments includes $3.7 billion that closed in the first half of the year, with the remaining $5.5 billion under contract and expected to close in the coming months. Among Welltower’s notable recent transactions is its acquisition of the Amica Senior Lifestyles portfolio in Canada, the remainder includes 26 transactions, 90% of which were privately negotiated and are predominantly focused on the seniors enrollment housing solutions, Chaudhri said.
He added Welltower sourced $900 million in transactions in the second quarter on an off-market basis. These new transactions are for assets with an average occupancy of 76% and a median age of three years.
“This newer vintage portfolio is well positioned to deliver strong cash flow growth and compounding as we execute our business plans alongside our best in class operating partners,” Chaudhri said.
Other properties Welltower acquired this year include The Virginian, a life plan community in Fairfax, Virginia; The Preston of Rockwood, a former Kisco community in Rockwood, Maryland; and Fountainwood at Lake Houston in Atascocita, Texas.
Underpinning the company’s philosophy of working with operators is a “utopian” vision for the future where everyone from frontline workers to owners work in alignment with a goal of high-quality operations. The company also is continuing to invest in its Welltower Business System, which provides operators and the REIT with greater visibility into operations, among other things.
“It’s easier for a team to do really hard things that matter, to do easy things that do not matter, Mitra said. “I truly believe that audacious dreams motivate people.”
Shifting focus and margins
Welltower is in the process of shifting some of its operational and technology focuses to better fit in with the customer experience. To date, Welltower has trained more than 8,000 site-level employees who currently benefit from using the company’s business system.
“The more time we spend with our operating partners go into the details of the business, the more opportunities we identify to improve the customer and employee experience and address numerous inefficiencies which exist in the industry,” said Welltower COO John Burkart during the earnings call.
Welltower also is bringing tech to bear in its future investment strategy, and Mitra believes the company’s data science platform can use AI to close transaction deals within 45 and 60 days, compared to the five to 10 months through traditional sales processes.
Looking ahead, Welltower continues to see “substantial opportunity” for further margin expansion, comparing the potential to the multifamily industry when it was “professionalized,” according to Burkhart. To accomplish this, the operations team is continually combing through expenses and cutting individual line items where it can.
However, Mitra believes additional revenue will be a greater factor in how far the REIT’s margins can go.
“Margin expansion, whatever it might be, we’re clearly optimistic about what it can get to, will be a function of, I will not be surprised, significantly more contribution comes from revenue than expenses,” Mitra said.
