Welltower Spends $2.4B on Senior Housing Assets Thanks to Market Distress

Welltower (WELL) has been deploying billions in cash to pick up new senior and assisted living properties as distress from mortgage defaults has meant big discounts on new assets.

The Toledo, Ohio-based real estate investment trust (REIT) invested $2.4 billion to buy new assets in the fourth quarter of 2024 alone, executives said during its quarterly earnings call Wednesday. Welltower plans to continue on that trajectory in 2025 and end the year with $8.7 billion of available liquidity to deploy.

And in the last 45 days alone, Welltower closed $2 billion of acquisitions across 27 different transactions, executives said.

“It’s incredibly stable, backed by top credit tenants with long-term leases delivering consistent returns,” John Burkart, chief operating officer at Welltower, said about Welltower’s portfolio during the call. “Occupancy during the period was consistent and an industry-leading 94.3 percent, and tenant retention remains strong at 93.6 percent. As for 2025, we expect another year of stable same-store [net operating income] growth of 2 to 3 percent.”

While most of its acquisitions have burdened its $5 billion credit line, Welltower also reduced the amount of debt on its books over the course of the year with a decrease of total debt from 20.9 percent at the end of 2023 to 12.9 percent at the end of 2024, Welltower reported.

A quarter of its entire portfolio is below 80 percent occupied, and Welltower is adding 10,000 to 12,000 units to its portfolio per year, executives said.

“I’d also note that the exponential rise in the value of homes, equity and fixed-income securities and other assets over the past 50 years has provided many seniors in our markets the ability to comfortably afford the same cost of senior living, which is much more efficient than home care, not to mention other benefits of senior living, including safer social and active lifestyles and peace of mind for families,” Burkart said.

In deploying that $8.7 billion in liquidity, Nikhil Chaudhri, chief investment officer, said Welltower is looking to data science to point out opportunities amid distressed assets plaguing the nation.

“The U.S. commercial real estate debt market continues to face significant headwinds with substantial maturities in 2025, and in subsequent years total outstanding commercial real estate debt stands at approximately $5.9 trillion with $1 trillion of loans coming due in 2025,” Chaudhri said. “Against this backdrop, we find ourselves in an extraordinary market environment where many industry participants are compelled to divest assets, allowing us to acquire high-quality properties at attractive valuations.”

Welltower saw $7 billion of gross investment activity over 2024 with $900 million of development spending and about $6 billion of acquisitions and loan funding.

Mark Hallum can be reached at mhallum@commercialobserver.com.