US real estate investment trust Welltower, the largest owner of senior housing communities in the United States, recorded a substantial jump in earnings in the third quarter. Backed by selective acquisitions and strengthened pricing power, adjusted earnings per share rose by 24.6 percent year-on-year. The occupancy rate across the Ohio-based company's entire portfolio stood at 88 percent. At the same time, the REIT is pursuing its long-term strategy of divesting a significant portion of its outpatient medical office buildings.
Normalised Funds from Operations (FFO) amounted to 1.67 US dollars per share, representing an increase of 24.6 percent compared with the same period last year. This figure adjusts for effects such as debt servicing, transaction costs and legal advisory. Total revenue climbed to 3.7 billion US dollars between July and September; compared with 2.7 billion US dollars in the third quarter of 2025, this represents an increase of around 38 percent.
Targeted acquisitions and selective disposals
Rather than pursuing large-scale mergers, executive management under CEO Shankh Mitra is focusing on targeted individual transactions. During the current year, Welltower completed 196 transactions, with the volume of completed or contractually committed investments reaching 21 billion US dollars. In the third quarter alone, the REIT acquired 43 senior housing properties for 2.7 billion US dollars. Despite this level of activity, Mitra told investors that the company actually acquires fewer than three percent of the properties it reviews.
Nikhil Chaudhri, Co-President and Chief Investment Officer at Welltower, sees further potential particularly in distressed assets. He pointed to approximately 8 billion US dollars in debt maturing across the US senior housing sector in 2026. While some owners may be able to recapitalise, many will be forced to sell under the pressure of higher interest rates. Welltower itself has disposed of outpatient medical facilities worth 2.1 billion US dollars so far this year, including 25 properties in the past quarter. In addition, Brookdale Senior Living recently acquired 30 properties previously leased by Welltower for 290 million US dollars.
Pricing power as the primary revenue driver
Net income rose to 414.8 million US dollars in the third quarter, up from 282 million US dollars in the prior-year quarter. The long-term senior housing portfolio grew by 21 percent year-on-year, marking its 16th consecutive quarter of compound growth. Management highlighted pricing power as the primary driver behind this growth: average monthly revenue per occupied unit increased by 5.3 percent during the quarter, supported by tight capacity and robust willingness to pay in the premium market segment.
Meanwhile, other expenses almost tripled from 44.7 million to 124.7 million US dollars. This reflects restructuring costs related to the previous year's acquisition of more than 600 British senior housing properties, which received clearance from UK regulators last month. In conclusion, CEO Mitra cautioned against viewing the sector's upward trend as a one-way bet, noting that demographic buzzwords alone do not guarantee success in a market environment that is becoming more complex and volatile every day.
