Welltower Inc. (NYSE: WELL) raised the midpoint of its full-year 2026 normalized funds from operations guidance by $0.10 to $6.50 per diluted share after third-quarter earnings benefited from strong seniors housing operations and an expanding investment portfolio.
The healthcare real estate investment trust now expects normalized FFO of $6.47 to $6.53 per diluted share, compared with its previous range of $6.36 to $6.44. The outlook includes $21.0 billion of pro rata investments that have closed or are under contract to close, but excludes unannounced acquisitions, transitions, restructurings and capital activity.
Normalized FFO was $1.67 per diluted share in the quarter ended September 30, up 25% from $1.34 a year earlier. Normalized FFO attributable to common stockholders increased to $1.26 billion from $919.2 million. Net income attributable to common stockholders rose to $396.6 million from $280.6 million, while diluted net income per share increased to $0.54 from $0.41.
Seniors housing drives portfolio growth
Same-store net operating income increased 15.8% across Welltower’s portfolio, led by 21.0% growth in its Seniors Housing Operating, or SHO, segment. Seniors Housing Triple-net SSNOI rose 4.2%, Skilled Nursing increased 2.8%, and Outpatient Medical advanced 2.4%.
SHO same-store revenue grew 9.1% as year-over-year average occupancy increased 320 basis points. Sequential occupancy improved by 120 basis points, compared with a 110-basis-point increase in the third quarter of 2025.
Revenue per occupied room, or RevPOR, rose 5.3% to $6,066 per month. Expense per occupied room, or ExpPOR, increased only 0.8% to $4,147, allowing the segment’s same-store NOI margin to expand by 310 basis points. Welltower attributed the performance to higher occupancy, stronger pricing and restrained unit-level expense growth.
For the full year, the company now expects same-store SHO NOI to increase 21.0% at the midpoint, 100 basis points above its previous midpoint. It forecasts SHO same-store revenue growth of 9.3%, including approximately 350 basis points of occupancy growth and 5.1% RevPOR growth. Same-store expense growth is projected at 4.6%, down from the prior 5.0% assumption, with ExpPOR expected to rise 0.6%.
The stronger SHO forecast lifted the midpoint of total portfolio same-store NOI growth guidance by 70 basis points to 15.6%. Guidance midpoints remain at 4.0% for Seniors Housing Triple-net and 2.5% for both Outpatient Medical and Skilled Nursing.
Investment activity expands the portfolio
Welltower announced $21.0 billion of pro rata investment activity, comprising $13.3 billion completed through the third quarter and another $7.7 billion closed or under contract as of October 26. Full-year activity spans 196 transactions with a median size of $35.5 million.
SHO communities acquired during the third quarter had an average age of about four years and in-place occupancy of approximately 66%, leaving room for potential operating improvement. The company said its Welltower Business System and technology capabilities are intended to support post-acquisition cash flow growth, although those benefits are not guaranteed.
Welltower also closed or announced $6.0 billion of dispositions and loan repayments during the year, including $1.9 billion of expected pro rata disposition proceeds. Capital has primarily been recycled into SHO properties. The company said more than $7 billion of Outpatient Medical dispositions and over $17 billion of SHO acquisitions since the announcement of the medical-office portfolio disposition have shifted its mix toward rental housing for an aging population.
The balance sheet remained lightly leveraged despite the investment volume. Net debt to adjusted EBITDA was 3.02 times at quarter-end, while adjusted fixed-charge coverage was 6.9 times. Welltower reported $9.5 billion of near-term available liquidity, including expected loan repayments and disposition proceeds, and said that amount could fully fund announced acquisitions. S&P and Moody’s maintained ratings of A- and A3, respectively, with positive outlooks.
Outlook and risks
Management expects occupancy and pricing to remain important revenue drivers, while constrained new construction may limit competing seniors housing supply. The presentation noted that construction starts are at more than 15-year lows and estimated that a new luxury seniors housing project takes about seven years on average to progress from formation to stabilization.
The outlook remains exposed to macroeconomic and execution risks. Elevated inflation and interest rates could affect financing and property costs, while operator financial stress, regulatory changes, labor availability and competition may pressure results. Additional uncertainties include Welltower’s ability to integrate acquisitions, complete contracted investments and dispositions, re-lease space, maintain its REIT status and realize the anticipated benefits of its data science and operating-system initiatives. Currency movements, geopolitical conflicts, public health emergencies, natural disasters and restricted access to capital could also cause actual performance to differ from management’s expectations.
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