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Welltower Inc WELL

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Welltower Sees Senior Housing Occupancy Improvement in Q2 and Momentum Likely to Carry Into Q3

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

The senior housing industry started to recover in the second quarter, leading to no-moat Welltower slightly outperforming our expectations and us reaffirming our $83 fair value estimate. Senior housing same-store occupancy increased 40 basis points sequentially in the second quarter to 74.3%, the first time the portfolio has seen a sequential increase since 2019. However, occupancy is still down 6.7% year over year, leading to a 6.4% decline in same-store revenue. While same-store net operating income for the portfolio fell 17.6% in the second quarter, that is a significant improvement over the declines seen in the prior four quarters and is better than the 25.9% decline we had anticipated. The rest of the portfolio held up better, with same-store NOI for the triple-net senior housing portfolio falling 2.7%, the skilled nursing portfolio falling 1.1%, the medical office portfolio up 2.2%, and the health system portfolio up 2.7%. In total, Welltower's overall same-store NOI was down 7.1% in the second quarter, slightly better than our estimate of an 8.5% decline. Welltower reported normalized funds from operation of $0.79, which is 4 cents better than our estimate.

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Company Profile

Business Description

Welltower owns a diversified healthcare portfolio of over 1,600 in-place properties spread across the senior housing, medical office, and skilled nursing/post-acute care sectors. The portfolio includes over 100 properties in both Canada and the United Kingdom as the company looks for additional investment opportunities in countries with mature healthcare systems that operate similarly to that of the United States.

4500 Dorr Street
Toledo, OH, 43615
T +1 419 247-2800
Sector Real Estate
Industry REIT - Healthcare Facilities
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 423


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