(Reuters) -Welltower raised its 2025 funds from operations forecast on Monday and announced $23 billion in deals to deepen its bet on the booming senior-housing sector demand, while pivoting away from slower-growing medical-office assets.
The real estate investment trust, which owns senior housing, outpatient medical centers, and healthcare properties across the U.S., Canada, and the UK, said the deals include $14 billion in acquisitions of senior housing communities either closed or under contract, a $7.2 billion divestiture of its outpatient medical portfolio, and additional investments.
Welltower expects that these transactions will add to its normalized funds from operations in 2026. The deals are expected to be fully funded through cash and $9 billion of incremental asset sales, loan payoffs and other capital recycling activity.
The company now expects 2025 normalized FFO, a key performance measure for REITs, in the range of $5.24 to $5.30 per share, compared to its previous range of $5.06 to $5.14 apiece. This is above the analysts’ average estimate of $5.11 per share, according to data compiled by LSEG.
Welltower reported normalized FFO of $1.34 per share for the quarter ended September 30, representing a 20.7% rise from the previous year, and surpassing analysts’ expectations of $1.30 per share. This continues the company’s streak of consecutive quarterly beats, now extending to five.
The increasing population of older Americans and their growing healthcare needs have led to a surge in demand for senior living communities.
Welltower’s same-store net operating income from its senior-housing properties rose 14.5% year over year.
However, the company posted a net profit of 41 cents per share for the quarter, falling short of analysts’ expectations of 52 cents per share.
Welltower also announced a “10 year program” under which its five executive officers will receive no other compensation than $110,000 of annual base salary and a long-term incentive award from 2026 through 2035.
(Reporting by Sruthi Narasimha Chari in Bengaluru; Editing by Alan Barona)
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