Welltower(WELL)2024-10-29 17:05Financial Data and Key Metrics Changes - The company reported a 21% increase in FFO per share and raised its guidance by 2 billion for the first time in company history [8] - Year-over-year same-store NOI growth was 12.6%, with a significant increase in total portfolio NOI [48] Business Line Data and Key Metrics Changes - The senior housing operating portfolio achieved a remarkable 23% year-over-year same-store NOI growth, marking eight consecutive quarters of over 20% growth [8][21] - The outpatient medical business posted a 2.2% year-over-year same-store NOI growth, maintaining a stable occupancy rate of 94.5% [22] - The triple-net lease portfolio saw a same-store NOI increase of 5.8% year-over-year [50] Market Data and Key Metrics Changes - The company experienced a 310 basis points year-over-year increase in same-store occupancy, with a sequential occupancy gain of 120 basis points [26] - The spread between RevPOR (revenue per occupied room) and ExpPOR (expense per occupied room) remains historically wide, contributing to a 300 basis points year-over-year margin expansion [10][28] Company Strategy and Development Direction - The company is focused on deepening its market presence through bolt-on acquisitions rather than broadening its geographic footprint [17] - The rollout of a new technology platform is expected to enhance operational efficiency and improve customer experience [15][30] - The company anticipates significant growth in the senior housing sector driven by demographic trends, with 5,000 Americans turning 80 every day starting next year [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong demand for senior housing and a favorable supply outlook due to declining construction starts [11][13] - The company is well-positioned with a leverage ratio of 3.7 times and nearly 1.2 billion in transactions since the last quarterly update, bringing total year-to-date investment activity to over 8.2 billion, reflecting a significant increase compared to pre-COVID levels [55] Q&A Session Summary Question: Can you discuss the historically wide gap between unit revenue and unit expense? - Management noted that flow-through margins are expected to improve as occupancy approaches pre-COVID levels, with current margins in the low-60s range [70][72] Question: What are the economic conditions for new construction? - Management indicated that construction costs remain high, and significant rent growth relative to labor costs is necessary for new projects to be economically viable [75][76] Question: What drives top-line growth and pricing expectations for 2025? - Management refrained from speculating on 2025 but highlighted the potential for improved occupancy and pricing based on current trends [79][80] Question: Can you elaborate on traffic trends and turnover in the portfolio? - Management reported increased traffic and improved closing ratios, indicating better execution and market share capture [83] Question: What is the status of the tech platform rollout? - Management confirmed that the initial investment is being made by the company, with expectations for improved financial results as the platform is fully implemented [95][97] Question: How is the acquisition pipeline looking? - Management stated that they are engaged in discussions with several private peers, with a focus on quality over quantity in acquisitions [99]