8-K
Welltower Inc. (WELL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2021
Welltower Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-8923 | 34-1096634 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) | |||
| 4500 Dorr Street, | Toledo, | Ohio | 43615 | ||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (419) 247-2800
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, $1.00 par value per share | WELL | New York Stock Exchange |
| 4.800% Notes due 2028 | WELL28 | New York Stock Exchange |
| 4.500% Notes due 2034 | WELL34 | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02 Results of Operations and Financial Condition.
On November 4, 2021, Welltower Inc. (the “Company”) issued a press release that announced operating results for its third quarter ended September 30, 2021. The press release refers to a supplemental information package that is available on the Company's website (www.welltower.com), free of charge. Copies of the press release and supplemental information package have been furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report, and are incorporated herein by reference.
The information included in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release of Welltower Inc. dated November 4, 2021
99.2 Welltower Inc. Supplemental Information Package for the quarter ended September 30, 2021.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WELLTOWER INC. | |
|---|---|
| By: | /s/ Matthew McQueen |
| Name: | Matthew McQueen |
| Title: | Executive Vice President – General Counsel & Corporate Secretary |
Dated: November 4, 2021
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Document
FOR IMMEDIATE RELEASE
November 4, 2021
For more information contact:
Tim McHugh (419) 247-2800
Welltower Reports Third Quarter 2021 Results
Toledo, Ohio, November 4, 2021…..Welltower Inc. (NYSE:WELL) today announced results for the quarter ended September 30, 2021.
Recent Highlights
•Reported net income attributable to common stockholders of $0.42 per diluted share
•Reported normalized FFO attributable to common stockholders of $0.80 per diluted share
•Seniors Housing Operating ("SHO") portfolio occupancy increased approximately 210 basis points ("bps") during the third quarter, exceeding our July guidance of an approximate gain of 190 bps
•Achieved same store REVPOR growth of 2.2% within the SHO portfolio during the third quarter, resulting in strong sequential same store revenue growth of 3.5%
•During the third quarter, year-over-year same store revenue growth for the SHO portfolio turned positive in the United States and United Kingdom for the first time since the beginning of the pandemic, a trend that accelerated into quarter end
•Completed $2.2 billion of pro rata gross investments during the third quarter and $4.1 billion year-to-date, including the previously announced acquisition of a portfolio of 85 seniors housing properties previously owned by Holiday Retirement for $1.58 billion
•Subsequent to quarter end, we entered into definitive agreements to acquire four distinct seniors housing portfolios for a pro rata gross investment amount of $1.3 billion
•Year-to-date, sold 29.5 million shares of common stock under our ATM program via forward sale agreements for total gross proceeds of approximately $2.4 billion, of which approximately 11.8 million shares remain unsettled which are expected to generate future gross proceeds of $1.0 billion
•Moody's Investors Services and S&P Global Ratings revised their ratings outlook for Welltower to Stable from Negative and affirmed Welltower's issuer credit ratings as 'Baa1' and 'BBB+', respectively
•Initiated a program with a national payor to deliver wellness coordination services through the presence of onsite Wellness Advisors to senior residents in the New York market. This partnership, the third such program across our seniors housing portfolio, will strengthen residents' connection to health care and wellness resources, enabling aging in place and improved quality of life
•MSCI ESG rating upgraded to 'AA' from 'A', driven by our continued commitment to strong governance practices
COVID-19 Update
SHO Portfolio Virtually all of our communities are currently accepting new residents, resulting in an increase in move-in activity and occupancy rates. Month end occupancy rates are as follows:
| March 2021 | April 2021 | May 2021 | June 2021 | July 2021 | August 2021 | September 2021 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Spot occupancy (1) | 72.7 | % | 73.2 | % | 73.7 | % | 74.6 | % | 75.2 | % | 75.9 | % | 76.7 | % |
| Sequential occupancy change (2) | 0.5 | % | 0.5 | % | 0.9 | % | 0.6 | % | 0.8 | % | 0.8 | % |
(1) Spot occupancy represents approximate month end occupancy at our share for 591 properties in operation as of December 31, 2020, including unconsolidated properties but excluding acquisitions, executed dispositions, development conversions since this date as well as one property closed for redevelopment.
(2) Sequential occupancy changes are based on actual spot occupancy and may not recalculate due to rounding.
In the current quarter, SHO portfolio expenses were significantly higher than expectations, driven by higher seasonal utility costs and elevated labor expenses mainly resulting from an increased utilization of contract labor due to a rise in occupancy and a challenging labor market. Our share of contract labor totaled $19 million, which resulted in an unfavorable sequential impact of $9 million or $0.02 per diluted share on net income attributable to common stockholders and normalized FFO for the three months ended September 30, 2021.
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| 3Q21 Earnings Release | November 4, 2021 |
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Our share of property-level expenses associated with the COVID-19 pandemic relating to our total SHO portfolio, net of reimbursements including Provider Relief Funds and similar programs in the U.K. and Canada, totaled a benefit of approximately $1 million and $25 million for the three and nine months ended September 30, 2021, respectively, as compared to an expense of approximately $17 million and $64 million for the three and nine months ended September 30, 2020, respectively. These costs included higher labor expenses coupled with expenditures related to procurement of personal protective equipment and other supplies, net of any reimbursements. Such amounts had a favorable impact on net income attributable to common stockholders and normalized FFO per diluted share of less than $0.01 and $0.06, for the three and nine months ended September 30, 2021, respectively, and an unfavorable impact of $0.04 and $0.15 per diluted share for the three and nine months ended September 30, 2020, respectively.
Capital Activity and Liquidity Inclusive of available borrowings under our line of credit, cash and cash equivalents, and IRC Section 1031 deposits, at September 30, 2021, we have $4.0 billion of near-term available liquidity and no material senior unsecured note maturities until 2024. On July 30, 2021, we entered into an amended and restated equity distribution agreement, which among other amendments, increased the total amount of shares of common stock that may be offered and sold under the ATM program from $2.0 billion to $2.5 billion. During the third quarter, we sold 11.5 million shares of common stock under our ATM program via forward sale agreements at an initial weighted average price of $84.36 per share which are expected to generate gross proceeds of approximately $966 million. Since the beginning of the year, we sold 29.5 million shares of common stock under our ATM program via forward sale agreements which are expected to generate gross proceeds of approximately $2.4 billion. As of September 30, 2021, approximately 11.8 million shares remain unsettled, which are expected to generate future gross proceeds of $1.0 billion.
Dividend On November 4, 2021, the Board of Directors declared a cash dividend for the quarter ended September 30, 2021 of $0.61 per share. This dividend, which will be paid on November 23, 2021 to stockholders of record on November 16, 2021, will be our 202nd consecutive quarterly cash dividend. The declaration and payment of future quarterly dividends remains subject to review and approval by the Board of Directors.
Quarterly Investment and Disposition Activity In the third quarter, we completed $2.2 billion of pro rata gross investments including $2.1 billion in acquisitions and loan funding as well as $141 million in development funding. We converted three development projects for an aggregate pro rata amount of $66 million. Additionally, during the quarter we completed pro rata property dispositions and loan payoffs of $488 million.
Notable Investment Activity Completed During the Quarter
Holiday Retirement During the third quarter, we closed on the previously announced acquisition of a portfolio of 85 seniors housing properties owned by Holiday Retirement for $1.58 billion. The portfolio is valued at $152,000 per unit, representing a discount to estimated replacement cost in excess of 30%. Atria Senior Living ("Atria") assumed operations of the portfolio following its acquisition of the Holiday management company. The transaction has significant growth upside through the post-COVID recovery in seniors housing fundamentals, implementation of Atria's technologically advanced operating platform and capital investment in assets.
Additionally during the third quarter, we acquired eight seniors housing communities operated by Holiday Retirement, now Atria, for $115 million or $126,000 per unit, representing a significant discount to replacement cost.
Aspect Health Acquisition As previously announced, we formed a new 95/5 joint venture with Aspect Health and simultaneously acquired seven medical office buildings in infill markets across the New York City metropolitan area for a pro rata investment amount of $98 million. The class-A portfolio has a weighted average remaining lease term of 12 years. With the transaction, we will have a 10-year exclusivity agreement with Aspect Health which allows the joint venture to finance future development projects in the New York City metropolitan area.
StoryPoint Senior Living As previously announced, in August we completed the acquisition of six seniors housing communities located in Ohio and Tennessee for approximately $141 million. In September, we acquired an additional property located in Wisconsin for approximately $19 million. The seven communities will be operated by StoryPoint under a triple-net master lease.
Other Transactions Additionally during the third quarter, we acquired four seniors housing communities for $44 million which were added to the existing RIDEA relationship with Frontier Management and one health system property for $16 million which was added to the in place triple-net lease with ProMedica. We disposed of 21 properties previously leased to Genesis, 13 properties previously leased to ProMedica in addition to one long-term/post-acute property and two medical office buildings for proceeds of $488 million, resulting in a gain on sale of $120 million.
Outlook for Fourth Quarter 2021 The degree to which the COVID-19 pandemic continues to impact our operations and those of our operators and tenants, including the variability in the timing of recovery, is dependent on a variety of factors and remains highly uncertain. Accordingly, we are only introducing earnings guidance for the quarter ended December 31, 2021 and expect to report net income attributable to common stockholders in a range of $0.20 to $0.25 per diluted share and normalized FFO attributable to common stockholders in a range of $0.78 to $0.83 per diluted share. In preparing our guidance, we have made the following assumptions:
•Provider Relief Funds: Our fourth quarter guidance does not include the recognition of any Provider Relief Funds which may be received during the quarter.
•SHO Portfolio Occupancy: Midpoint of normalized FFO guidance assumes a sequential increase in average pro rata occupancy of 140 bps in the fourth quarter.
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| 3Q21 Earnings Release | November 4, 2021 |
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•General and Administrative Expenses: We anticipate full year general and administrative expenses to be approximately $129 million to $131 million and stock-based compensation expense to be approximately $19 million.
•Investments: Our fourth quarter 2021 earnings guidance includes only those acquisitions closed or announced to date. Furthermore, no transitions or restructures beyond those announced to date are included.
•Development: We anticipate funding approximately $221 million of development in 2021 relating to projects underway on September 30, 2021.
•Dispositions: We expect pro rata disposition proceeds of $1.6 billion at a blended yield of 7.1% in 2021. This includes approximately $1.2 billion in proceeds from dispositions and loan payoffs completed through September 30, 2021, $283 million of expected proceeds from properties classified as held-for-sale as of September 30, 2021 and $26 million in expected loan payoffs.
Our guidance does not include any additional investments, dispositions or capital transactions beyond those we have announced, nor any other expenses, impairments, unanticipated additions to the loan loss reserve or other additional normalizing items. Please see the Supplemental Reporting Measures section for further discussion and our definition of normalized FFO and Exhibit 3 for a reconciliation of the outlook for net income available to common stockholders to normalized FFO attributable to common stockholders. We will provide additional detail regarding our fourth quarter outlook and assumptions on the third quarter 2021 conference call.
Conference Call Information We have scheduled a conference call on Friday, November 5, 2021 at 8:30 a.m. Eastern Time to discuss our third quarter 2021 results, industry trends and portfolio performance. Telephone access will be available by dialing (844) 467-7115 or (409) 983-9837 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 19, 2021. To access the rebroadcast, dial (855) 859-2056 or (404) 537-3406 (international). The conference ID number is 9392405. To participate in the webcast, log on to www.welltower.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days.
Supplemental Reporting Measures We believe that net income and net income attributable to common stockholders ("NICS"), as defined by U.S. generally accepted accounting principles ("U.S. GAAP"), are the most appropriate earnings measurements. However, we consider funds from operations ("FFO"), normalized FFO, NOI, SSNOI, REVPOR and SS REVPOR to be useful supplemental measures of our operating performance. These supplemental measures are disclosed on our pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners’ noncontrolling ownership interests and adding our minority ownership share of unconsolidated amounts. We do not control unconsolidated investments. While we consider pro rata disclosures useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution.
Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO attributable to common stockholders, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Normalized FFO attributable to common stockholders represents FFO attributable to common stockholders adjusted for certain items detailed in Exhibit 2. We believe that normalized FFO attributable to common stockholders is a useful supplemental measure of operating performance because investors and equity analysts may use this measure to compare the operating performance of the Company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items.
We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. SSNOI is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in the same store amounts five full quarters after acquisition or being placed into service. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the period, are excluded from the same store amounts. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from the same store amounts until five full quarters post completion of the redevelopment. Properties undergoing operator transitions and/or segment transitions are also excluded from the same store amounts until five full quarters post
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completion of the operator transition or segment transition. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from same store amounts until five full quarters after the properties are placed back into service. SSNOI excludes non-cash NOI and includes adjustments to present consistent property ownership percentages and to translate Canadian properties and UK properties using a consistent exchange rate. Normalizers include adjustments that in management’s opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in our financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceed 0.50% of SSNOI growth per property type) are separately disclosed and explained. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.
REVPOR represents the average revenues generated per occupied room per month at our Seniors Housing Operating properties. It is calculated as our pro rata version of total resident fees and services revenues from the income statement divided by average monthly occupied room days. SS REVPOR is used to evaluate the REVPOR performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. It is based on the same pool of properties used for SSNOI and includes any revenue normalizations used for SSNOI. We use REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of our Seniors Housing Operating portfolio independent of fluctuating occupancy rates. They are also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our Seniors Housing Operating portfolio.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended September 30, 2021, which is available on the Company’s website (www.welltower.com), for information and reconciliations of additional supplemental reporting measures.
About Welltower Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a real estate investment trust (“REIT”), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at www.welltower.com. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors”. Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the Securities and Exchange Commission. The information on our website is not incorporated by reference in this press release, and our web address is included as an inactive textual reference only.
Forward-Looking Statements and Risk Factors This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimate” or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the duration and scope of the COVID-19 pandemic; the impact of the COVID-19 pandemic on occupancy rates and on the operations of Welltower and its operators/tenants; actions governments take in response to the COVID-19 pandemic, including the introduction of public health measures and other regulations affecting Welltower’s properties and the operations of Welltower and its operators/tenants; uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation; the effects of health and safety measures adopted by Welltower and its operators/tenants related to the COVID-19 pandemic; increased operational costs as a result of health and safety measures related to COVID-19; the impact of the COVID-19 pandemic on the business and financial condition of operators/tenants and their ability to make payments to Welltower; disruptions to Welltower's property acquisition and disposition activity due to economic uncertainty caused by COVID-19; general economic uncertainty in key markets as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to
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pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain Welltower’s qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. Finally, Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.
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Welltower Inc.
Financial Exhibits
| Consolidated Balance Sheets (unaudited) | ||||
|---|---|---|---|---|
| (in thousands) | ||||
| September 30, | ||||
| 2021 | 2020 | |||
| Assets | ||||
| Real estate investments: | ||||
| Land and land improvements | $ | 3,698,858 | $ | 3,386,072 |
| Buildings and improvements | 29,775,951 | 27,782,471 | ||
| Acquired lease intangibles | 1,653,415 | 1,509,053 | ||
| Real property held for sale, net of accumulated depreciation | 251,152 | 362,886 | ||
| Construction in progress | 562,487 | 414,833 | ||
| Less accumulated depreciation and intangible amortization | (6,634,061) | (6,002,775) | ||
| Net real property owned | 29,307,802 | 27,452,540 | ||
| Right of use assets, net | 526,614 | 480,861 | ||
| Real estate loans receivable, net of credit allowance | 1,115,645 | 414,706 | ||
| Net real estate investments | 30,950,061 | 28,348,107 | ||
| Other assets: | ||||
| Investments in unconsolidated entities | 977,955 | 822,586 | ||
| Goodwill | 68,321 | 68,321 | ||
| Cash and cash equivalents | 303,982 | 1,603,740 | ||
| Restricted cash | 58,663 | 551,593 | ||
| Straight-line rent receivable | 346,159 | 334,203 | ||
| Receivables and other assets | 774,884 | 813,047 | ||
| Total other assets | 2,529,964 | 4,193,490 | ||
| Total assets | $ | 33,480,025 | $ | 32,541,597 |
| Liabilities and equity | ||||
| Liabilities: | ||||
| Unsecured credit facility and commercial paper | $ | 290,996 | $ | — |
| Senior unsecured notes | 11,116,067 | 11,321,573 | ||
| Secured debt | 2,262,345 | 2,459,659 | ||
| Lease liabilities | 544,547 | 427,842 | ||
| Accrued expenses and other liabilities | 1,093,959 | 1,041,368 | ||
| Total liabilities | 15,307,914 | 15,250,442 | ||
| Redeemable noncontrolling interests | 389,195 | 330,053 | ||
| Equity: | ||||
| Common stock | 436,640 | 418,361 | ||
| Capital in excess of par value | 22,148,859 | 20,835,026 | ||
| Treasury stock | (108,478) | (94,022) | ||
| Cumulative net income | 8,605,064 | 8,163,869 | ||
| Cumulative dividends | (14,115,705) | (13,088,891) | ||
| Accumulated other comprehensive income | (103,177) | (126,469) | ||
| Total Welltower Inc. stockholders’ equity | 16,863,203 | 16,107,874 | ||
| Noncontrolling interests | 919,713 | 853,228 | ||
| Total equity | 17,782,916 | 16,961,102 | ||
| Total liabilities and equity | $ | 33,480,025 | $ | 32,541,597 |
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| 3Q21 Earnings Release | November 4, 2021 | | --- | --- || Consolidated Statements of Income (unaudited) | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (in thousands, except per share data) | | | | | | | | | | | | | Three Months Ended | | | | Nine Months Ended | | | | | | | September 30, | | | | September 30, | | | | | | | 2021 | | 2020 | | 2021 | | 2020 | | | Revenues: | | | | | | | | | | | | Resident fees and services | $ | 835,617 | $ | 740,956 | $ | 2,299,972 | $ | 2,360,488 | | | Rental income | 357,984 | | 275,046 | | 1,015,550 | | 1,061,311 | | | | Interest income | 39,864 | | 16,750 | | 97,891 | | 48,060 | | | | Other income | 6,332 | | 4,122 | | 19,438 | | 14,092 | | | | Total revenues | 1,239,797 | | 1,036,874 | | 3,432,851 | | 3,483,951 | | | Expenses: | | | | | | | | | | | | Property operating expenses | 729,400 | | 634,717 | | 1,989,383 | | 1,977,262 | | | | Depreciation and amortization | 267,754 | | 255,532 | | 753,065 | | 795,704 | | | | Interest expense | 122,522 | | 124,851 | | 368,005 | | 393,215 | | | | General and administrative expenses | 32,256 | | 31,003 | | 93,618 | | 100,546 | | | | Loss (gain) on derivatives and financial instruments, net | (8,078) | | 1,395 | | (6,503) | | 10,480 | | | | Loss (gain) on extinguishment of debt, net | (5) | | 33,004 | | 50,964 | | 33,253 | | | | Provision for loan losses, net | (271) | | 2,857 | | 7,309 | | 11,351 | | | | Impairment of assets | 1,490 | | 23,313 | | 48,750 | | 126,291 | | | | Other expenses | 3,575 | | 11,544 | | 26,256 | | 37,247 | | | | Total expenses | 1,148,643 | | 1,118,216 | | 3,330,847 | | 3,485,349 | | | Income (loss) from continuing operations before income taxes | | | | | | | | | | | | and other items | 91,154 | | (81,342) | | 102,004 | | (1,398) | | | Income tax (expense) benefit | | (4,940) | | (2,003) | | (6,662) | | (9,678) | | | Income (loss) from unconsolidated entities | | (15,832) | | (5,981) | | (10,759) | | (8,341) | | | Gain (loss) on real estate dispositions, net | | 119,954 | | 484,304 | | 223,702 | | 902,991 | | | Income (loss) from continuing operations | | 190,336 | | 394,978 | | 308,285 | | 883,574 | | | Net income (loss) | | 190,336 | | 394,978 | | 308,285 | | 883,574 | | | Less: | Net income (loss) attributable to noncontrolling interests (1) | 10,673 | | 69,393 | | 30,819 | | 68,459 | | | Net income (loss) attributable to common stockholders | | $ | 179,663 | $ | 325,585 | $ | 277,466 | $ | 815,115 | | Average number of common shares outstanding: | | | | | | | | | | | | Basic | 428,031 | | 417,027 | | 420,955 | | 414,822 | | | | Diluted | 429,983 | | 418,987 | | 422,835 | | 416,860 | | | Net income (loss) attributable to common stockholders per share: | | | | | | | | | | | | Basic | $ | 0.42 | $ | 0.78 | $ | 0.66 | $ | 1.96 | | | Diluted(2) | $ | 0.42 | $ | 0.77 | $ | 0.65 | $ | 1.94 | | Common dividends per share | | $ | 0.61 | $ | 0.61 | $ | 1.83 | $ | 2.09 | | (1) Includes amounts attributable to redeemable noncontrolling interests. | | | | | | | | | | | (2) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | | | | | | | | | |
Page 7 of 10
| 3Q21 Earnings Release | November 4, 2021 | | --- | --- || FFO Reconciliations | | | | | | | | | | | | Exhibit 1 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (in thousands, except per share data) | | | Three Months Ended | | | | | | Nine Months Ended | | | | | | | | | | September 30, | | | | | | September 30, | | | | | | | | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | | | Net income (loss) attributable to common stockholders | | | $ | 179,663 | | $ | 325,585 | | $ | 277,466 | | $ | 815,115 | | | Depreciation and amortization | | | 267,754 | | | 255,532 | | | 753,065 | | | 795,704 | | | | Impairments and losses (gains) on real estate dispositions, net | | | (118,464) | | | (460,991) | | | (174,952) | | | (776,700) | | | | Noncontrolling interests(1) | | | (11,095) | | | 48,559 | | | (40,202) | | | (3,389) | | | | Unconsolidated entities(2) | | | 27,881 | | | 16,329 | | | 66,369 | | | 46,005 | | | | NAREIT FFO attributable to common stockholders | | | 345,739 | | | 185,014 | | | 881,746 | | | 876,735 | | | | Normalizing items, net(3) | | | (3,472) | | | 167,597 | | | 124,680 | | | 256,150 | | | | Normalized FFO attributable to common stockholders | | | $ | 342,267 | | $ | 352,611 | | $ | 1,006,426 | | $ | 1,132,885 | | | Average diluted common shares outstanding | | | 429,983 | | | 418,987 | | | 422,835 | | | 416,860 | | | | Per diluted share data attributable to common stockholders: | | | | | | | | | | | | | | | | | Net income (loss)(4) | | $ | 0.42 | | $ | 0.77 | | $ | 0.65 | | $ | 1.94 | | | | NAREIT FFO | | $ | 0.80 | | $ | 0.44 | | $ | 2.09 | | $ | 2.10 | | | | Normalized FFO | | $ | 0.80 | | $ | 0.84 | | $ | 2.38 | | $ | 2.72 | | | Normalized FFO Payout Ratio: | | | | | | | | | | | | | | | | | Dividends per common share | | $ | 0.61 | | $ | 0.61 | | $ | 1.83 | | $ | 2.09 | | | | Normalized FFO attributable to common stockholders per share | | $ | 0.80 | | $ | 0.84 | | $ | 2.38 | | $ | 2.72 | | | | | Normalized FFO payout ratio | 76 | | % | 73 | | % | 77 | | % | 77 | | % | | Other items:(5) | | | | | | | | | | | | | | | | Net straight-line rent and above/below market rent amortization(6) | | | $ | (19,809) | | $ | (18,729) | | $ | (58,672) | | $ | (69,286) | | | Non-cash interest expenses(7) | | | 6,223 | | | 4,339 | | | 14,572 | | | 9,437 | | | | Recurring cap-ex, tenant improvements, and lease commissions | | | (22,722) | | | (19,443) | | | (54,581) | | | (59,638) | | | | Stock-based compensation(8) | | | 4,479 | | | 6,565 | | | 13,989 | | | 20,279 | | | | (1) Represents noncontrolling interests' share of net FFO adjustments. | | | | | | | | | | | | | | | | (2) Represents Welltower's share of net FFO adjustments from unconsolidated entities. | | | | | | | | | | | | | | | | (3) See Exhibit 2. | | | | | | | | | | | | | | | | (4) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | | | | | | | | | | | | | | | | (5) Amounts presented net of noncontrolling interests' share and including Welltower's share of unconsolidated entities. | | | | | | | | | | | | | | | | (6) Excludes normalized other impairment (see Exhibit 2). | | | | | | | | | | | | | | | | (7) Excludes normalized incremental interest expense (see Exhibit 2). | | | | | | | | | | | | | | | | (8) Excludes certain severance related stock-based compensation recorded in other expense (see Exhibit 2). | | | | | | | | | | | | | | |
Page 8 of 10
| 3Q21 Earnings Release | November 4, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| Normalizing Items | Exhibit 2 | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands, except per share data) | Nine Months Ended | |||||||
| September 30, | ||||||||
| 2020 | 2021 | 2020 | ||||||
| Loss (gain) on derivatives and financial instruments, net | (8,078) | (1) | $ | 1,395 | $ | (6,503) | $ | 10,480 |
| Loss (gain) on extinguishment of debt, net | 33,004 | 50,964 | 33,253 | |||||
| Provision for loan losses, net | (2) | 2,857 | 7,309 | 11,351 | ||||
| Nonrecurring income tax benefits | — | (6,298) | — | |||||
| Incremental interest expense | — | — | 5,871 | |||||
| Other impairment | 112,398 | 49,241 | 146,508 | |||||
| Other expenses | (3) | 11,544 | 26,256 | 37,247 | ||||
| Leasehold interest adjustment | (4) | — | (640) | — | ||||
| Casualty losses, net of recoveries | (5) | — | 998 | — | ||||
| Normalizing items attributable to noncontrolling interests and unconsolidated entities, net | (6) | 6,399 | 3,353 | 11,440 | ||||
| Net normalizing items | (3,472) | $ | 167,597 | $ | 124,680 | $ | 256,150 | |
| Average diluted common shares outstanding | 418,987 | 422,835 | 416,860 | |||||
| Net normalizing items per diluted share | (0.01) | $ | 0.40 | $ | 0.29 | $ | 0.61 | |
| (1) Primarily related to mark-to-market of the equity warrants received as part of the Safanad/HC-One transaction that closed in the second quarter. | ||||||||
| (2) Primarily related to reserves for loan losses under the current expected credit losses accounting standard. | ||||||||
| (3) Primarily related to non-capitalizable transaction costs, including an accrual for noncapitalizable promotes. | ||||||||
| (4) Represents 13,214,000 of revenues and 12,574,000 of property operating expenses associated with a leasehold portfolio interest relating to 26 properties assumed by a wholly-owned affiliate in conjunction with the Holiday Retirement transaction. Subsequent to the initial transaction, we purchased eight of the leased properties and one of the properties was sold by the landlord and removed from the lease. No rent will be paid in excess of net cash flow relating to the leasehold properties and therefore, the net impact each quarter will be excluded from Normalized FFO. | ||||||||
| (5) Primarily relates to casualty losses net of any insurance recoveries. | ||||||||
| (6) Primarily related to non-capitalizable transaction costs. |
All values are in US Dollars.
| Outlook Reconciliation: Quarter Ending December 31, 2021 | Exhibit 3 | |||||
|---|---|---|---|---|---|---|
| (in millions, except per share data) | Current Outlook | |||||
| Low | High | |||||
| FFO Reconciliation: | ||||||
| Net income attributable to common stockholders | $ | 87 | $ | 109 | ||
| Impairments and losses (gains) on real estate dispositions, net(1,2) | (36) | (36) | ||||
| Depreciation and amortization(1) | 291 | 291 | ||||
| NAREIT FFO and Normalized FFO attributable to common stockholders | 342 | 364 | ||||
| Diluted per share data attributable to common stockholders: | ||||||
| Net income | $ | 0.20 | $ | 0.25 | ||
| NAREIT FFO and Normalized FFO | $ | 0.78 | $ | 0.83 | ||
| Other items:(1) | ||||||
| Net straight-line rent and above/below market rent amortization | $ | (19) | $ | (19) | ||
| Non-cash interest expenses | 4 | 4 | ||||
| Recurring cap-ex, tenant improvements, and lease commissions | (43) | (43) | ||||
| Stock-based compensation | 5 | 5 | ||||
| (1) Amounts presented net of noncontrolling interests' share and Welltower's share of unconsolidated entities. | ||||||
| (2) Includes estimated gains on expected dispositions. |
Page 9 of 10
| 3Q21 Earnings Release | November 4, 2021 | |||||
|---|---|---|---|---|---|---|
| Reconciliation of SHO SS REVPOR Growth | ||||||
| --- | ||||||
| (in thousands except SS REVPOR) | Three Months Ended | |||||
| September 30, | ||||||
| 2021 | 2020 | |||||
| Consolidated SHO revenues | $ | 839,519 | $ | 742,065 | ||
| Unconsolidated SHO revenues attributable to WELL(1) | 45,991 | 42,574 | ||||
| SHO revenues attributable to noncontrolling interests(2) | (73,414) | (58,505) | ||||
| SHO pro rata revenues(3) | 812,096 | 726,134 | ||||
| Non-cash revenues on same store properties | (562) | (848) | ||||
| Revenues attributable to non-same store properties | (142,217) | (54,813) | ||||
| Currency and ownership adjustments(4) | (448) | 2,266 | ||||
| Other normalizing adjustments(5) | — | (1,481) | ||||
| SHO SS revenues(6) | 668,869 | 671,258 | ||||
| Average occupied units/month(7) | 39,716 | 40,736 | ||||
| SHO SS REVPOR(8) | $ | 5,568 | $ | 5,448 | ||
| SS REVPOR YOY growth | 2.2 | % | ||||
| (1) Represents Welltower's interests in joint ventures where Welltower is the minority partner. | ||||||
| (2) Represents minority partners' interests in joint ventures where Welltower is the majority partner and includes an adjustment to remove revenues related to certain leasehold properties. See Exhibit 2 for more information. | ||||||
| (3) Represents SHO revenues at Welltower pro rata ownership. | ||||||
| (4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a /CAD rate of 1.2684 and to translate UK properties at a / rate of 1.38. | ||||||
| (5) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth. | ||||||
| (6) Represents SS SHO revenues at Welltower pro rata ownership. | ||||||
| (7) Represents average occupied units for SS properties on a pro rata basis. | ||||||
| (8) Represents pro rata SS average revenues generated per occupied room per month. |
All values are in US Dollars.
| Reconciliation of Sequential SS Revenue Growth | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | Three Months Ended | |||||
| September 30, 2021 | June 30, 2021 | |||||
| Consolidated SHO revenues | $ | 839,519 | $ | 742,549 | ||
| Unconsolidated SHO revenues attributable to WELL(1) | 45,991 | 45,032 | ||||
| SHO revenues attributable to noncontrolling interests(2) | (73,414) | (59,346) | ||||
| SHO pro rata revenues(3) | 812,096 | 728,235 | ||||
| Non-cash revenues on same store properties | (562) | (572) | ||||
| Revenues attributable to non-same store properties | (142,217) | (77,938) | ||||
| Currency and ownership adjustments(4) | (448) | (3,621) | ||||
| SHO SS revenues(5) | $ | 668,869 | $ | 646,104 | ||
| Sequential SS Revenue growth | 3.5 | % | ||||
| (1) Represents Welltower's interests in joint ventures where Welltower is the minority partner. | ||||||
| (2) Represents minority partners' interests in joint ventures where Welltower is the majority partner and includes an adjustment to remove revenues related to certain leasehold properties. See Exhibit 2 for more information. | ||||||
| (3) Represents SHO revenues at Welltower pro rata ownership. | ||||||
| (4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a /CAD rate of 1.2684 and to translate UK properties at a / rate of 1.38. | ||||||
| (5) Represents SS SHO revenues at Welltower pro rata ownership. |
All values are in US Dollars.
Page 10 of 10
Document
| Table of Contents | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Overview | 1 | |||||||||||
| --- | --- | |||||||||||
| Portfolio | 2 | |||||||||||
| Investment | 8 | |||||||||||
| Financial | 14 | |||||||||||
| Glossary | 19 | |||||||||||
| Supplemental Reporting Measures | 20 | |||||||||||
| Forward Looking Statements and Risk Factors | 24 | |||||||||||
| Overview | ||||||||||||
| --- | ||||||||||||
| (dollars and occupancy at Welltower pro rata ownership; dollars in thousands) | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| Portfolio Composition | Beds/Unit Mix | |||||||||||
| Average Age | Properties | Total | Independent Living | Assisted Living | Memory Care | Long-Term/ Post-Acute Care | ||||||
| Seniors Housing Operating | 18 | 781 | 90,181 | 49,774 | 29,539 | 12,384 | 526 | |||||
| Seniors Housing Triple-net | 15 | 350 | 29,036 | 5,688 | 16,235 | 6,809 | 304 | |||||
| Outpatient Medical | 15 | 376 | 22,256,093 | (1) | n/a | n/a | n/a | n/a | ||||
| Health System | 30 | 205 | 24,485 | 201 | 517 | 3,145 | 20,622 | |||||
| Long-Term/Post-Acute Care | 18 | 103 | 12,039 | — | 843 | — | 11,196 | |||||
| Total | 18 | 1,815 | ||||||||||
| NOI Performance | Same Store(2) | In-Place Portfolio(3) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Properties | 3Q20 NOI | 3Q21 NOI | % Change | Properties | Annualized <br>In-Place NOI | % of Total | ||||||
| Seniors Housing Operating | 527 | $ | 164,918 | $ | 140,363 | (14.9) | % | 735 | $ | 685,716 | 38.7 | % |
| Seniors Housing Triple-net(4) | 281 | 84,403 | 83,697 | (0.8) | % | 329 | 410,524 | 23.2 | % | |||
| Outpatient Medical | 350 | 96,727 | 99,974 | 3.4 | % | 365 | 417,788 | 23.6 | % | |||
| Health System | 190 | 35,729 | 36,712 | 2.8 | % | 201 | 161,732 | 9.1 | % | |||
| Long-Term/Post-Acute Care(4) | 77 | 22,511 | 22,281 | (1.0) | % | 90 | 95,076 | 5.4 | % | |||
| Total | 1,425 | $ | 404,288 | $ | 383,027 | (5.3) | % | 1,720 | $ | 1,770,836 | 100.0 | % |
| Portfolio Performance | Facility Revenue Mix | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Stable Portfolio(5) | Occupancy | EBITDAR Coverage(6) | EBITDARM Coverage(6) | Private Pay | Medicaid | Medicare | Other Government(7) | |||||
| Seniors Housing Operating | 76.7 | % | n/a | n/a | 96.5 | % | 1.2 | % | 0.5 | % | 1.8 | % |
| Seniors Housing Triple-net | 73.5 | % | 0.83 | 0.99 | 89.4 | % | 3.4 | % | 0.7 | % | 6.5 | % |
| Outpatient Medical | 94.7 | % | n/a | n/a | 100.0 | % | — | — | — | |||
| Health System(8) | 69.6 | % | 0.24 | 0.88 | 37.6 | % | 42.1 | % | 20.3 | % | — | % |
| Long-Term/Post-Acute Care | 73.5 | % | 1.25 | 1.50 | 30.3 | % | 35.9 | % | 33.8 | % | — | % |
| Total | 0.73 | 1.03 | 92.5 | % | 3.6 | % | 2.0 | % | 1.9 | % |
Notes:
(1) Indicates the total square footage of Outpatient Medical.
(2) See pages 21 and 22 for reconciliation.
(3) Excludes land parcels, loans, developments and investments held for sale. See page 21 for reconciliation.
(4) Same store NOI for these property types represents cash rent excluding the impact of expansions.
(5) Data as of September 30, 2021 for Seniors Housing Operating and Outpatient Medical and June 30, 2021 for remaining asset types.
(6) Represents trailing twelve month coverage metrics.
(7) Represents various federal and local reimbursement programs in the United Kingdom and Canada.
(8) EBITDAR and EBITDARM coverage as reported by ProMedica inclusive of sold properties prior to their disposition and the 4 properties classified as held for sale as of September 30, 2021.
| Portfolio | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands at Welltower pro rata ownership) | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| In-Place NOI Diversification(1) | |||||||||||||||
| By Partner: | Total Properties | Seniors Housing Operating | Seniors Housing <br>Triple-net | Outpatient<br>Medical | Health<br>System | Long-Term/ Post-Acute Care | Total | % of Total | |||||||
| Sunrise Senior Living North America | 121 | $ | 109,293 | $ | — | $ | — | $ | — | $ | — | $ | 109,293 | 6.2 | % |
| Sunrise Senior Living United Kingdom | 45 | 64,534 | — | — | — | — | 64,534 | 3.6 | % | ||||||
| ProMedica | 201 | — | — | — | 161,732 | — | 161,732 | 9.1 | % | ||||||
| Atria Senior Living | 93 | 90,304 | — | — | — | — | 90,304 | 5.1 | % | ||||||
| Avery Healthcare | 55 | 5,792 | 70,498 | — | — | — | 76,290 | 4.3 | % | ||||||
| Revera | 85 | 74,971 | — | — | — | — | 74,971 | 4.2 | % | ||||||
| Belmont Village | 21 | 63,565 | — | — | — | — | 63,565 | 3.6 | % | ||||||
| Brookdale Senior Living | 85 | (749) | 61,571 | — | — | — | 60,822 | 3.4 | % | ||||||
| Sagora Senior Living | 31 | 27,336 | 26,997 | — | — | — | 54,333 | 3.1 | % | ||||||
| Legend Senior Living | 33 | — | 49,815 | — | — | 1,088 | 50,903 | 2.9 | % | ||||||
| StoryPoint Senior Living | 43 | 233 | 36,620 | — | — | — | 36,853 | 2.1 | % | ||||||
| Remaining | 907 | 250,437 | 165,023 | 417,788 | — | 93,988 | 927,236 | 52.4 | % | ||||||
| Total | 1,720 | $ | 685,716 | $ | 410,524 | $ | 417,788 | $ | 161,732 | $ | 95,076 | $ | 1,770,836 | 100.0 | % |
| By Country: | |||||||||||||||
| United States | 1,464 | $ | 479,357 | $ | 332,081 | $ | 417,788 | $ | 161,732 | $ | 87,774 | $ | 1,478,732 | 83.5 | % |
| United Kingdom | 114 | 85,808 | 74,722 | — | — | — | 160,530 | 9.1 | % | ||||||
| Canada | 142 | 120,551 | 3,721 | — | — | 7,302 | 131,574 | 7.4 | % | ||||||
| Total | 1,720 | $ | 685,716 | $ | 410,524 | $ | 417,788 | $ | 161,732 | $ | 95,076 | $ | 1,770,836 | 100.0 | % |
| By MSA: | |||||||||||||||
| Los Angeles | 70 | $ | 50,932 | $ | 19,199 | $ | 32,392 | $ | — | $ | — | $ | 102,523 | 5.8 | % |
| New York | 77 | 40,819 | 11,160 | 36,521 | 5,476 | 3,192 | 97,168 | 5.5 | % | ||||||
| Greater London | 47 | 58,262 | 17,442 | — | — | — | 75,704 | 4.3 | % | ||||||
| Dallas | 57 | 21,895 | 15,001 | 28,512 | 806 | 4,068 | 70,282 | 4.0 | % | ||||||
| Philadelphia | 45 | 4,386 | 1,590 | 26,736 | 20,269 | 555 | 53,536 | 3.0 | % | ||||||
| Washington D.C. | 42 | 28,624 | 1,456 | 7,053 | 11,402 | 3,873 | 52,408 | 3.0 | % | ||||||
| Houston | 32 | 10,960 | 3,320 | 28,781 | — | — | 43,061 | 2.4 | % | ||||||
| San Francisco | 20 | 19,964 | 10,291 | — | 4,650 | — | 34,905 | 2.0 | % | ||||||
| Charlotte | 26 | 1,355 | 9,673 | 20,845 | — | — | 31,873 | 1.8 | % | ||||||
| San Diego | 18 | 14,750 | 6,631 | 7,462 | — | 2,748 | 31,591 | 1.8 | % | ||||||
| Chicago | 42 | 9,844 | 5,240 | 5,682 | 10,397 | — | 31,163 | 1.8 | % | ||||||
| Seattle | 29 | 9,308 | 3,210 | 16,336 | 1,416 | — | 30,270 | 1.7 | % | ||||||
| Montréal | 21 | 29,903 | — | — | — | — | 29,903 | 1.7 | % | ||||||
| Minneapolis | 20 | (1,029) | 15,270 | 14,146 | — | — | 28,387 | 1.6 | % | ||||||
| Toronto | 25 | 25,035 | — | — | — | — | 25,035 | 1.4 | % | ||||||
| Raleigh | 12 | 5,881 | 17,552 | 998 | — | — | 24,431 | 1.4 | % | ||||||
| Baltimore | 19 | 3,226 | — | 11,496 | 4,179 | 4,542 | 23,443 | 1.3 | % | ||||||
| Hattiesburg | 2 | — | 19,772 | 2,113 | — | — | 21,885 | 1.2 | % | ||||||
| Miami | 36 | 219 | — | 15,651 | 5,533 | — | 21,403 | 1.2 | % | ||||||
| Boston | 24 | 17,578 | — | 2,991 | — | (496) | 20,073 | 1.1 | % | ||||||
| Remaining | 1,056 | 333,804 | 253,717 | 160,073 | 97,604 | 76,594 | 921,792 | 52.0 | % | ||||||
| Total | 1,720 | $ | 685,716 | $ | 410,524 | $ | 417,788 | $ | 161,732 | $ | 95,076 | $ | 1,770,836 | 100.0 | % |
Notes:
(1) Represents current quarter annualized In-Place NOI. See page 21 for reconciliation.
| Portfolio | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars, units and occupancy at Welltower pro rata ownership; dollars in thousands) | ||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||
| Seniors Housing Operating | ||||||||||||||||||||||||||
| Total Portfolio Performance(1) | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | |||||||||||||||||||||
| Properties | 563 | 607 | 608 | 630 | 736 | |||||||||||||||||||||
| Units | 55,498 | 58,370 | 58,185 | 59,670 | 71,721 | |||||||||||||||||||||
| Total occupancy | 77.9 | % | 76.0 | % | 72.7 | % | 73.0 | % | 74.9 | % | ||||||||||||||||
| Total revenues | $ | 726,133 | $ | 703,039 | $ | 711,118 | $ | 728,235 | $ | 812,096 | ||||||||||||||||
| Operating expenses | 550,755 | 539,465 | 539,058 | 584,484 | 644,241 | |||||||||||||||||||||
| NOI | $ | 175,378 | $ | 163,574 | $ | 172,060 | $ | 143,751 | $ | 167,855 | ||||||||||||||||
| Recurring cap-ex | $ | 11,851 | $ | 14,356 | $ | 7,255 | $ | 14,448 | $ | 15,395 | ||||||||||||||||
| Other cap-ex | $ | 27,577 | $ | 27,728 | $ | 13,413 | $ | 31,794 | $ | 35,588 | ||||||||||||||||
| Same Store Performance(2) | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||
| Properties | 527 | 527 | 527 | 527 | 527 | |||||||||||||||||||||
| Occupancy | 78.3 | % | 76.9 | % | 73.9 | % | 74.4 | % | 76.3 | % | ||||||||||||||||
| Same store revenues | $ | 671,258 | $ | 656,817 | $ | 633,567 | $ | 646,104 | $ | 668,869 | ||||||||||||||||
| Compensation | 309,066 | 301,737 | 303,853 | 305,670 | 321,673 | |||||||||||||||||||||
| Utilities | 28,300 | 28,111 | 30,027 | 26,482 | 30,547 | |||||||||||||||||||||
| Food | 24,639 | 25,257 | 23,130 | 23,708 | 25,179 | |||||||||||||||||||||
| Repairs and maintenance | 16,255 | 16,572 | 16,636 | 17,879 | 18,975 | |||||||||||||||||||||
| Property taxes | 26,386 | 24,882 | 26,797 | 26,086 | 25,806 | |||||||||||||||||||||
| All other | 101,694 | 113,091 | 108,113 | 107,154 | 106,326 | |||||||||||||||||||||
| Same store operating expenses | 506,340 | 509,650 | 508,556 | 506,979 | 528,506 | |||||||||||||||||||||
| Same store NOI | $ | 164,918 | $ | 147,167 | $ | 125,011 | $ | 139,125 | $ | 140,363 | ||||||||||||||||
| NOI margin | 24.6 | % | 22.4 | % | 19.7 | % | 21.5 | % | 21.0 | % | ||||||||||||||||
| Year over year NOI growth rate | (14.9) | % | Partners | Properties(3) | Pro Rata Units(3) | Welltower Ownership %(4) | Core Markets | 3Q21 NOI | % of Total | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||
| Sunrise Senior Living | 166 | 13,065 | 98.0 | % | Southern California | $ | 18,474 | 11.0 | % | |||||||||||||||||
| Atria Senior Living | 93 | 11,296 | 100.0 | % | Greater London | 13,928 | 8.3 | % | ||||||||||||||||||
| Revera | 85 | 8,351 | 75.0 | % | Northern California | 12,278 | 7.3 | % | ||||||||||||||||||
| Belmont Village | 21 | 2,804 | 95.0 | % | New York / New Jersey | 9,009 | 5.4 | % | ||||||||||||||||||
| Senior Resource Group | 24 | 3,268 | 61.3 | % | Washington D.C. | 7,906 | 4.7 | % | ||||||||||||||||||
| Brandywine Living | 29 | 2,791 | 99.6 | % | Montréal | 7,467 | 4.4 | % | ||||||||||||||||||
| Cogir | 23 | 3,242 | 89.2 | % | Toronto | 6,251 | 3.7 | % | ||||||||||||||||||
| Chartwell Retirement Residences | 42 | 4,479 | 49.9 | % | Boston | 4,155 | 2.5 | % | ||||||||||||||||||
| Clover Management | 33 | 3,630 | 90.1 | % | Ottawa | 2,315 | 1.4 | % | ||||||||||||||||||
| Sagora Senior Living | 14 | 1,483 | 98.2 | % | Birmingham, UK | 2,297 | 1.4 | % | ||||||||||||||||||
| Frontier Management | 64 | 3,731 | 94.5 | % | Seattle | 2,208 | 1.3 | % | ||||||||||||||||||
| Oakmont Senior Living | 15 | 1,437 | 100.0 | % | Vancouver | 1,784 | 1.1 | % | ||||||||||||||||||
| Balfour Senior Living | 7 | 675 | 95.0 | % | Manchester, UK | 1,751 | 1.0 | % | ||||||||||||||||||
| Signature Senior Lifestyle | 11 | 758 | 75.0 | % | Core Markets | 89,823 | 53.5 | % | ||||||||||||||||||
| Remaining | 108 | 10,665 | All Other | 78,032 | 46.5 | % | ||||||||||||||||||||
| Total | 735 | 71,675 | Total | $ | 167,855 | 100.0 | % |
Notes:
(1) Properties, units and occupancy exclude land parcels and properties under development.
(2) See pages 21 and 22 for reconciliation.
(3) Represents In-Place Portfolio.
(4) Welltower ownership percentage weighted based on In-Place NOI. See page 21 for reconciliation.
| Portfolio |
|---|
(dollars in thousands at Welltower pro rata ownership)
New Supply in Our US Seniors Housing Operating Portfolio
We have strategically acquired and developed properties in major US metro markets that benefit from population growth and density, affluence, job growth, and higher barriers to entry. New supply in a 3-mile ring around our properties potentially impacts just 1.6% of our total annualized In-Place NOI (IPNOI).
| 3-Mile Ring(1) | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Welltower | Welltower | |||||||||||||||||||||||
| MSA | Prop. / Units | Annualized<br><br>IPNOI(2) | % of US SHO Portfolio | Prop. / Units Under Construction(3) | Prop. / Units Potentially Impacted | IPNOI Potentially Impacted(4) | 5 Year Total Pop. Growth(5) | 5 Year 75+ Pop. Growth(5) | Avg. Pop. Density(6) | Household Income(7) | Housing Value(7) | Est. Net Annual Inventory Growth(8) | Est. Annual Job Growth(9) | |||||||||||
| Los Angeles | 34 / 3,890 | $ | 50,932 | 10.6 | % | 8 / 1,268 | 7 / 634 | $ | 5,663 | 1.1 | % | 9.0 | % | 6,796 | $ | 100,862 | $ | 1,042,035 | 0.9 | % | 7.2 | % | ||
| New York | 32 / 2,757 | 40,819 | 8.5 | % | 3 / 591 | 4 / 342 | 2,544 | 5.1 | % | 9.8 | % | 4,162 | 119,267 | 549,240 | (0.1) | % | 5.3 | % | ||||||
| Washington D.C. | 16 / 1,758 | 28,624 | 6.0 | % | 5 / 553 | 7 / 920 | 2,726 | 3.5 | % | 11.6 | % | 5,280 | 137,375 | 713,342 | 2.0 | % | 2.5 | % | ||||||
| Dallas | 23 / 3,025 | 21,895 | 4.6 | % | 1 / 229 | 1 / 214 | 32 | 6.1 | % | 26.4 | % | 3,222 | 79,339 | 339,677 | 2.4 | % | 5.4 | % | ||||||
| San Francisco | 13 / 1,628 | 19,964 | 4.2 | % | — | — | — | 2.4 | % | 9.8 | % | 8,972 | 131,187 | 1,186,392 | (1.3) | % | 4.9 | % | ||||||
| Boston | 18 / 1,365 | 17,578 | 3.7 | % | 1 / 150 | 1 / 112 | 1,526 | 4.4 | % | 8.8 | % | 2,736 | 131,937 | 780,148 | (0.3) | % | 5.9 | % | ||||||
| San Diego | 8 / 1,033 | 14,750 | 3.1 | % | — | — | — | 2.2 | % | 13.1 | % | 4,634 | 112,683 | 968,370 | (0.4) | % | 4.4 | % | ||||||
| Boulder, CO | 7 / 616 | 12,033 | 2.5 | % | — | — | — | 4.5 | % | 23.8 | % | 2,109 | 101,769 | 695,001 | N/A | 5.3 | % | |||||||
| Denver | 5 / 734 | 11,636 | 2.4 | % | 5 / 710 | 2 / 364 | 3,895 | 5.5 | % | 24.1 | % | 5,112 | 81,798 | 581,288 | 1.5 | % | 5.4 | % | ||||||
| Sacramento | 8 / 637 | 11,302 | 2.4 | % | — | — | — | 3.1 | % | 12.4 | % | 3,683 | 92,582 | 518,299 | (0.6) | % | 4.3 | % | ||||||
| Houston | 10 / 953 | 10,960 | 2.3 | % | 2 / 230 | 2 / 241 | 2,370 | 5.8 | % | 23.6 | % | 3,484 | 80,630 | 376,426 | 1.0 | % | 4.8 | % | ||||||
| Chicago | 18 / 1,947 | 9,844 | 2.1 | % | 1 / 177 | 1 / 131 | 376 | 1.3 | % | 9.3 | % | 3,135 | 99,060 | 349,438 | 1.0 | % | 2.7 | % | ||||||
| San Jose | 4 / 480 | 9,795 | 2.0 | % | 1 / 41 | 1 / 137 | 598 | 2.2 | % | 11.3 | % | 6,744 | 145,204 | 1,505,838 | (1.3) | % | 3.9 | % | ||||||
| Seattle | 16 / 1,643 | 9,308 | 1.9 | % | 2 / 175 | 3 / 362 | 560 | 6.1 | % | 18.0 | % | 4,942 | 103,069 | 663,121 | 0.3 | % | 5.5 | % | ||||||
| Buffalo | 10 / 1,254 | 7,879 | 1.6 | % | — | — | — | 5.5 | % | 8.4 | % | 2,922 | 73,386 | 190,759 | (0.3) | % | 7.2 | % | ||||||
| Riverside | 5 / 514 | 7,250 | 1.5 | % | 1 / 115 | 1 / 59 | 449 | 2.5 | % | 13.1 | % | 2,976 | 96,781 | 546,201 | (0.7) | % | 4.5 | % | ||||||
| San Antonio | 4 / 1,075 | 6,620 | 1.4 | % | 1 / 112 | 1 / 162 | 869 | 6.9 | % | 27.4 | % | 2,465 | 68,936 | 272,597 | (0.5) | % | 4.9 | % | ||||||
| Charlottesville, VA | 1 / 302 | 6,218 | 1.3 | % | — | — | — | 2.7 | % | 10.3 | % | 2,089 | 58,803 | 375,962 | N/A | 2.5 | % | |||||||
| Raleigh | 2 / 250 | 5,881 | 1.2 | % | 1 / 138 | 1 / 176 | 2,538 | 4.2 | % | 23.7 | % | 3,210 | 93,995 | 331,133 | 2.8 | % | 5.2 | % | ||||||
| Portland, OR | 9 / 937 | 5,865 | 1.2 | % | 1 / 210 | 1 / 53 | 96 | 5.1 | % | 15.6 | % | 2,500 | 86,161 | 440,586 | 2.7 | % | 5.0 | % | ||||||
| Salisbury, MD | 2 / 214 | 5,492 | 1.1 | % | — | — | — | 8.4 | % | 10.7 | % | 676 | 76,355 | 424,518 | N/A | 6.1 | % | |||||||
| Cincinnati | 6 / 913 | 5,172 | 1.1 | % | 1 / 199 | 1 / 99 | — | 2.0 | % | 9.5 | % | 2,051 | 63,243 | 160,315 | (0.5) | % | 4.2 | % | ||||||
| Trenton, NJ | 2 / 207 | 4,714 | 1.0 | % | — | — | — | 6.5 | % | 12.9 | % | 852 | 126,630 | 489,925 | N/A | 4.7 | % | |||||||
| Santa Rosa, CA | 4 / 512 | 4,676 | 1.0 | % | — | — | — | 0.4 | % | 5.5 | % | 2,016 | 82,841 | 729,913 | N/A | 4.5 | % | |||||||
| Santa Maria, CA | 1 / 363 | 4,652 | 1.0 | % | — | — | — | 1.0 | % | 3.8 | % | 2,245 | 121,828 | 945,988 | N/A | 4.0 | % | |||||||
| Total - Top 25 | 258 / 29,007 | $ | 333,859 | 69.6 | % | 34 / 4,898 | 34 / 4,006 | $ | 24,242 | 3.8 | % | 13.6 | % | 4,298 | $ | 112,410 | $ | 768,878 | 0.5 | % | 5.1 | % | ||
| All Other US SHO Markets | 280 / 29,276 | 145,498 | 30.4 | % | 19 / 2,470 | 22 / 2,623 | 4,311 | 3.0 | % | 10.3 | % | 2,277 | 77,389 | 332,074 | ||||||||||
| Total US SHO | 538 / 58,283 | $ | 479,357 | 100.0 | % | 53 / 7,368 | 56 / 6,629 | $ | 28,553 | 3.4 | % | 11.9 | % | 3,256 | $ | 101,334 | $ | 630,725 | ||||||
| % of Total IPNOI | 1.6 | % | ||||||||||||||||||||||
| US National Average | 3.2 | % | 10.8 | % | 94 | $ | 72,039 | $ | 273,858 | 1.7 | % | (10) | 4.3 | % |
Notes:
(1) Based on historical drawing patterns in our portfolio, a 3-mile ring is appropriate for most urban markets, which accounts for the vast majority of our portfolio. A 5-mile ring is appropriate for most suburban markets. A larger ring is appropriate for rural markets. Each market is unique due to population density, town lines, geographic barriers, and roads/infrastructure. In the interest of simplicity, we have applied a 3-mile competitive ring to all of our properties given the preponderance of urban locations. We have also included a sensitivity with a 5-mile ring.
(2) Represents annualized IPNOI. See pages 2 and 21 for a reconciliation.
(3) Construction data provided by NIC, reflects competitive seniors housing properties within 3 miles of Welltower SHO properties for US markets.
(4) Reflects annualized IPNOI for Welltower SHO properties within 3 miles of new construction for the component of our project that potentially competes with the project under construction.
(5) Total population and 75+ population growth data represents simple averages of Claritas estimates for 2022-2027.
(6) Average population density data represents average population per square mile within a 3-mile ring based on 2022 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 3Q21. Net inventory growth is calculated at the MSA level based on historical deletions from inventory and a 5-6 quarter construction period to reflect our urban locations. Total - Top 25 Net Inventory Growth weighted by IPNOI.
(9) Annual job growth data represents MSA level growth from August 2020 - August 2021 per Bureau of Labor Statistics. Total - Top 25 Estimated Annual Job Growth weighted by IPNOI.
(10) Reflects net inventory growth for NIC Top 99 Markets.
| Portfolio |
|---|
(dollars in thousands at Welltower pro rata ownership)
New Supply in Our US Seniors Housing Operating Portfolio
We have strategically acquired and developed properties in major US metro markets that benefit from population growth and density, affluence, job growth, and high barriers to entry. New supply in a 5-mile ring around our properties potentially impacts just 3.9% of our total annualized In-Place NOI (IPNOI).
| 5-Mile Ring(1) | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Welltower | Welltower | |||||||||||||||||||||||
| MSA | Prop. / Units | Annualized IPNOI(2) | % of US SHO Portfolio | Prop. / Units Under Construction(3) | Prop. / Units Potentially Impacted | IPNOI Potentially Impacted(4) | 5 Year Total Pop. Growth(5) | 5 Year 75+ Pop. Growth(5) | Avg. Pop. Density(6) | Household Income(7) | Housing Value(7) | Est. Net Annual Inventory Growth(8) | Est. Annual Job Growth(9) | |||||||||||
| Los Angeles | 34 / 3,890 | $ | 50,932 | 10.6 | % | 10 / 1,468 | 16 / 1,844 | $ | 9,738 | 1.1 | % | 9.5 | % | 6,633 | $ | 95,067 | $ | 970,102 | 0.9 | % | 7.2 | % | ||
| New York | 32 / 2,757 | 40,819 | 8.5 | % | 7 / 1,289 | 9 / 752 | 4,252 | 5.2 | % | 9.8 | % | 4,109 | 114,327 | 530,624 | (0.1) | % | 5.3 | % | ||||||
| Washington D.C. | 16 / 1,758 | 28,624 | 6.0 | % | 7 / 765 | 11 / 1,292 | 4,848 | 3.4 | % | 11.9 | % | 5,198 | 128,657 | 684,557 | 2.0 | % | 2.5 | % | ||||||
| Dallas | 23 / 3,025 | 21,895 | 4.6 | % | 6 / 977 | 5 / 711 | 3,526 | 6.1 | % | 26.2 | % | 2,932 | 77,227 | 332,882 | 2.4 | % | 5.4 | % | ||||||
| San Francisco | 13 / 1,628 | 19,964 | 4.2 | % | 2 / 159 | 2 / 230 | 186 | 2.5 | % | 9.9 | % | 7,640 | 131,708 | 1,130,549 | (1.3) | % | 4.9 | % | ||||||
| Boston | 18 / 1,365 | 17,578 | 3.7 | % | 3 / 354 | 3 / 226 | 1,586 | 4.5 | % | 9.5 | % | 2,740 | 124,028 | 710,891 | (0.3) | % | 5.9 | % | ||||||
| San Diego | 8 / 1,033 | 14,750 | 3.1 | % | — | — | — | 2.3 | % | 11.9 | % | 4,310 | 108,618 | 866,944 | (0.4) | % | 4.4 | % | ||||||
| Boulder, CO | 7 / 616 | 12,033 | 2.5 | % | — | — | — | 4.9 | % | 22.1 | % | 1,412 | 107,077 | 679,682 | N/A | 5.3 | % | |||||||
| Denver | 5 / 734 | 11,636 | 2.4 | % | 6 / 791 | 4 / 528 | 8,397 | 5.3 | % | 22.2 | % | 4,782 | 80,354 | 523,295 | 1.5 | % | 5.4 | % | ||||||
| Sacramento | 8 / 637 | 11,302 | 2.4 | % | — | — | — | 3.1 | % | 12.7 | % | 3,323 | 90,839 | 491,273 | (0.6) | % | 4.3 | % | ||||||
| Houston | 10 / 953 | 10,960 | 2.3 | % | 3 / 450 | 3 / 344 | 3,072 | 6.1 | % | 26.4 | % | 3,474 | 79,257 | 303,902 | 1.0 | % | 4.8 | % | ||||||
| Chicago | 18 / 1,947 | 9,844 | 2.1 | % | 3 / 404 | 3 / 371 | 557 | 1.2 | % | 10.0 | % | 2,991 | 103,542 | 364,513 | 1.0 | % | 2.7 | % | ||||||
| San Jose | 4 / 480 | 9,795 | 2.0 | % | 2 / 154 | 2 / 280 | 4,898 | 2.2 | % | 11.3 | % | 5,754 | 146,128 | 1,494,081 | (1.3) | % | 3.9 | % | ||||||
| Seattle | 16 / 1,643 | 9,308 | 1.9 | % | 3 / 311 | 5 / 507 | 2,148 | 6.2 | % | 19.7 | % | 4,411 | 106,103 | 666,766 | 0.3 | % | 5.5 | % | ||||||
| Buffalo | 10 / 1,254 | 7,879 | 1.6 | % | — | — | — | 5.3 | % | 8.5 | % | 2,633 | 69,327 | 180,286 | (0.3) | % | 7.2 | % | ||||||
| Riverside | 5 / 514 | 7,250 | 1.5 | % | 1 / 115 | 2 / 138 | 2,338 | 2.5 | % | 13.6 | % | 2,434 | 80,114 | 523,398 | (0.7) | % | 4.5 | % | ||||||
| San Antonio | 4 / 1,075 | 6,620 | 1.4 | % | 3 / 383 | 1 / 162 | 2,387 | 6.9 | % | 26.7 | % | 2,310 | 70,363 | 255,377 | (0.5) | % | 4.9 | % | ||||||
| Charlottesville, VA | 1 / 302 | 6,218 | 1.3 | % | — | — | — | 3.9 | % | 12.6 | % | 1,489 | 74,576 | 377,174 | N/A | 2.5 | % | |||||||
| Raleigh | 2 / 250 | 5,881 | 1.2 | % | 1 / 138 | 1 / 176 | 2,538 | 4.9 | % | 29.4 | % | 2,681 | 101,868 | 370,229 | 2.8 | % | 5.2 | % | ||||||
| Portland, OR | 9 / 937 | 5,865 | 1.2 | % | 2 / 477 | 4 / 265 | 2,596 | 5.0 | % | 14.9 | % | 2,098 | 84,735 | 422,527 | 2.7 | % | 5.0 | % | ||||||
| Salisbury, MD | 2 / 214 | 5,492 | 1.1 | % | — | — | — | 8.2 | % | 10.5 | % | 588 | 78,759 | 387,428 | N/A | 6.1 | % | |||||||
| Cincinnati | 6 / 913 | 5,172 | 1.1 | % | 1 / 199 | 1 / 99 | — | 2.1 | % | 10.0 | % | 1,665 | 63,008 | 161,145 | (0.5) | % | 4.2 | % | ||||||
| Trenton, NJ | 2 / 207 | 4,714 | 1.0 | % | 1 / 98 | 1 / 112 | 1,681 | 5.4 | % | 12.6 | % | 1,116 | 124,877 | 467,344 | N/A | 4.7 | % | |||||||
| Santa Rosa, CA | 4 / 512 | 4,676 | 1.0 | % | — | — | — | 0.6 | % | 6.7 | % | 1,119 | 85,680 | 739,848 | N/A | 4.5 | % | |||||||
| Santa Maria, CA | 1 / 363 | 4,652 | 1.0 | % | — | — | — | 1.4 | % | 4.8 | % | 1,736 | 104,620 | 962,329 | N/A | 4.0 | % | |||||||
| Total - Top 25 | 258 / 29,007 | $ | 333,859 | 69.6 | % | 61 / 8,532 | 73 / 8,037 | $ | 54,748 | 3.9 | % | 14.0 | % | 4,003 | $ | 109,311 | $ | 737,635 | 0.5 | % | 5.1 | % | ||
| All Other US SHO Markets | 280 / 29,276 | 145,498 | 30.4 | % | 39 / 5,665 | 40 / 4,829 | 14,009 | 3.0 | % | 10.9 | % | 1,919 | 72,824 | 322,332 | ||||||||||
| Total US SHO | 538 / 58,283 | $ | 479,357 | 100.0 | % | 100 / 14,197 | 113 / 12,866 | $ | 68,757 | 3.4 | % | 12.4 | % | 2,929 | $ | 97,771 | $ | 606,282 | ||||||
| % of Total IPNOI | 3.9 | % | ||||||||||||||||||||||
| US National Average | 3.2 | % | 10.8 | % | 94 | $ | 72,039 | $ | 273,858 | 1.7 | % | (10) | 4.3 | % |
Notes:
(1) Based on historical drawing patterns in our portfolio, a 3-mile ring is appropriate for most urban markets, which accounts for the vast majority of our portfolio. A 5-mile ring is appropriate for most suburban markets. A larger ring is appropriate for rural markets. Each market is unique due to population density, town lines, geographic barriers, and roads/infrastructure. In the interest of simplicity, we have applied a 3-mile competitive ring to all of our properties given the preponderance of urban locations. We have also included a sensitivity with a 5-mile ring.
(2) Represents annualized IPNOI. See pages 2 and 21 for a reconciliation.
(3) Construction data provided by NIC, reflects competitive seniors housing properties within 5 miles of Welltower SHO properties for US markets.
(4) Reflects annualized IPNOI for Welltower SHO properties within 5 miles of new construction for the component of our project that potentially competes with the project under construction.
(5) Total population and 75+ population growth data represents simple averages of Claritas estimates for 2022-2027.
(6) Average population density data represents average population per square mile within a 5-mile ring based on 2022 Claritas estimates.
(7) Household income and household value data are medians weighted by IPNOI.
(8) NIC MAP Data and Analysis Service, 3Q21. Net inventory growth is calculated at the MSA level based on historical deletions from inventory and a 5-6 quarter construction period to reflect our urban locations. Total - Top 25 Net Inventory Growth weighted by IPNOI.
(9) Annual job growth data represents MSA level growth from August 2020 - August 2021 per Bureau of Labor Statistics. Total -Top 25 Estimated Annual Job Growth weighted by IPNOI.
(10) Reflects net inventory growth for NIC Top 99 Markets.
| Portfolio | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands at Welltower pro rata ownership) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Payment Coverage Stratification | |||||||||||||||||
| EBITDARM Coverage(1) | EBITDAR Coverage(1) | ||||||||||||||||
| % of In-Place NOI | Seniors Housing Triple-net | Long-Term/ Post- Acute Care | Total | Weighted Average Maturity | Number of Leases | Seniors Housing Triple-net | Long-Term/ Post- Acute Care | Total | Weighted Average Maturity | Number of Leases | |||||||
| < 0.85x | 7.6 | % | 0.1 | % | 7.7 | % | 7 | 10 | 11.0 | % | 1.3 | % | 12.3 | % | 7 | 12 | |
| 0.85x - 0.95x | — | % | — | % | — | % | — | — | 0.6 | % | 0.8 | % | 1.4 | % | 10 | 2 | |
| 0.95x - 1.05x | 4.1 | % | 1.2 | % | 5.3 | % | 7 | 3 | 3.0 | % | 0.6 | % | 3.6 | % | 9 | 5 | |
| 1.05x - 1.15x | — | % | 0.8 | % | 0.8 | % | 10 | 1 | — | % | — | % | — | % | — | — | |
| 1.15x - 1.25x | 2.4 | % | 0.6 | % | 3.0 | % | 8 | 4 | 4.6 | % | 0.1 | % | 4.7 | % | 11 | 3 | |
| 1.25x - 1.35x | 5.2 | % | — | % | 5.2 | % | 11 | 3 | — | % | — | % | — | % | — | — | |
| > 1.35x | — | % | 1.8 | % | 1.8 | % | 10 | 5 | — | % | 1.7 | % | 1.7 | % | 10 | 4 | |
| Total | 19.3 | % | 4.5 | % | 23.8 | % | 8 | 26 | 19.2 | % | 4.5 | % | 23.7 | % | 8 | 26 | |
| Revenue and Lease Maturity(2) | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Rental Income | |||||||||||||||||
| Year | Seniors Housing <br>Triple-net | Outpatient Medical | Health <br>System | Long-Term / Post-Acute Care | Interest <br>Income | Total <br>Revenues | % of Total | ||||||||||
| 2021 | $ | — | $ | 13,385 | $ | — | $ | — | $ | 3,728 | $ | 17,113 | 1.5 | % | |||
| 2022 | — | 46,454 | — | 2,913 | 4,625 | 53,992 | 4.6 | % | |||||||||
| 2023 | 1,642 | 47,501 | — | 840 | 5,943 | 55,926 | 4.7 | % | |||||||||
| 2024 | 11,431 | 60,616 | — | — | 20,241 | 92,288 | 7.8 | % | |||||||||
| 2025 | 4,917 | 29,353 | — | — | 3,140 | 37,410 | 3.2 | % | |||||||||
| 2026 | 61,976 | 37,690 | — | 9,493 | 100,330 | 209,489 | 17.8 | % | |||||||||
| 2027 | 29,700 | 26,514 | — | — | 190 | 56,404 | 4.8 | % | |||||||||
| 2028 | 4,675 | 25,047 | — | 16,953 | 1,192 | 47,867 | 4.1 | % | |||||||||
| 2029 | 32,248 | 21,268 | — | — | 559 | 54,075 | 4.6 | % | |||||||||
| 2030 | 15,505 | 37,158 | — | 27,146 | 475 | 80,284 | 6.8 | % | |||||||||
| Thereafter | 165,234 | 112,698 | 158,280 | 32,185 | 4,862 | 473,259 | 40.1 | % | |||||||||
| $ | 327,328 | $ | 457,684 | $ | 158,280 | $ | 89,530 | $ | 145,285 | $ | 1,178,107 | 100.0 | % | ||||
| Weighted Avg Maturity Years | 9 | 6 | 12 | 9 | 3 | 7 |
Notes:
(1) Represents trailing twelve month coverage metrics as of June 30, 2021 for stable portfolio only. Agreements included represent 83% of total Seniors Housing Triple-net and Long-Term/Post-Acute Care In-Place NOI. See page 21 for a reconciliation. Agreements with mixed units use the predominant type based on investment balance.
(2) Excludes all land parcels, developments and investments held for sale. Rental income represents annualized cash base rent for effective lease agreements. The amounts are derived from the current contracted monthly cash base rent, net of collectability reserves, if applicable. Rental income does not include common area maintenance charges, the amortization of above/below market lease intangibles or other non cash income. Interest income represents contractual rate of interest for loans, net of collectability reserves if applicable.
| Portfolio | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars, square feet and occupancy at Welltower pro rata ownership; dollars in thousands except per square feet) | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Outpatient Medical | |||||||||||||||
| Total Portfolio Performance(1) | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | ||||||||||
| Properties | 359 | 357 | 357 | 360 | 366 | ||||||||||
| Square feet | 19,150,586 | 17,315,776 | 16,917,791 | 17,291,495 | 17,383,040 | ||||||||||
| Occupancy | 94.0 | % | 94.5 | % | 94.4 | % | 94.8 | % | 94.7 | % | |||||
| Total revenues | $ | 170,733 | $ | 166,679 | $ | 157,162 | $ | 160,514 | $ | 160,003 | |||||
| Operating expenses | 52,312 | 50,231 | 47,764 | 46,184 | 48,796 | ||||||||||
| NOI | $ | 118,421 | $ | 116,448 | $ | 109,398 | $ | 114,330 | $ | 111,207 | |||||
| Revenues per square foot | $ | 35.66 | $ | 38.50 | $ | 37.16 | $ | 37.13 | $ | 36.82 | |||||
| NOI per square foot | $ | 24.73 | $ | 26.90 | $ | 25.87 | $ | 26.45 | $ | 25.59 | |||||
| Recurring cap-ex | $ | 7,592 | $ | 7,278 | $ | 4,178 | $ | 5,978 | $ | 7,327 | |||||
| Other cap-ex | $ | 8,946 | $ | 6,169 | $ | 2,376 | $ | 2,014 | $ | 2,064 | |||||
| Same Store Performance(2) | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Properties | 350 | 350 | 350 | 350 | 350 | ||||||||||
| Occupancy | 95.0 | % | 95.0 | % | 94.7 | % | 94.8 | % | 94.7 | % | |||||
| Same store revenues | $ | 142,126 | $ | 143,166 | $ | 145,520 | $ | 144,677 | $ | 146,564 | |||||
| Same store operating expenses | 45,399 | 43,645 | 45,744 | 45,376 | 46,590 | ||||||||||
| Same store NOI | $ | 96,727 | $ | 99,521 | $ | 99,776 | $ | 99,301 | $ | 99,974 | |||||
| NOI margin | 68.1 | % | 69.5 | % | 68.6 | % | 68.6 | % | 68.2 | % | |||||
| Year over year NOI growth rate | 3.4 | % | |||||||||||||
| Portfolio Diversification<br><br>by Tenant(3) | Rental Income | % of Total | Quality Indicators | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| Kelsey-Seybold | $ | 25,022 | 5.5 | % | Health system affiliated properties as % of NOI(3) | 90.3 | % | ||||||||
| Virtua | 15,104 | 3.3 | % | Health system affiliated tenants as % of rental income(3) | 65.6 | % | |||||||||
| Novant Health | 14,343 | 3.1 | % | Retention (trailing twelve months)(3) | 90.0 | % | |||||||||
| Providence Health & Services | 13,588 | 3.0 | % | In-house managed properties as % of square feet(3,4) | 88.2 | % | |||||||||
| Common Spirit Health | 12,707 | 2.8 | % | Average remaining lease term (years)(3) | 6.2 | ||||||||||
| Remaining portfolio | 376,920 | 82.3 | % | Average building size (square feet)(3) | 60,165 | ||||||||||
| Total | $ | 457,684 | 100.0 | % | Average age (years) | 15 | |||||||||
| Expirations(3) | 2021 | 2022 | 2023 | 2024 | 2025 | Thereafter | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Occupied square feet | 465,282 | 1,577,744 | 1,732,586 | 2,032,382 | 1,048,198 | 9,486,071 | |||||||||
| % of occupied square feet | 2.8 | % | 9.7 | % | 10.6 | % | 12.4 | % | 6.4 | % | 58.1 | % |
Notes:
(1) Property count, occupancy, square feet and per square foot metrics exclude properties under development and all land parcels. Per square foot amounts are annualized.
(2) Includes 350 same store properties representing 16,517,307 square feet. See pages 21 and 22 for reconciliation.
(3) Excludes all land parcels, developments and investments held for sale. Rental income represents annualized cash base rent for effective lease agreements. The amounts are derived from the current contracted monthly cash base rent, net of collectability reserves, if applicable. Rental income does not include common area maintenance charges, the amortization of above/below market lease intangibles or other non cash income. Retention includes month-to-month tenants retained.
(4) Excludes tenant managed properties.
| Investment |
|---|
(dollars in thousands at Welltower pro rata ownership)
Relationship Investment History
| Detail of Acquisitions/JVs(1) | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017 | 2018 | 2019 | 2020 | 1Q21 | 2Q21 | 3Q21 | 17-21 Total | ||||||||||
| Count | 18 | 15 | 27 | 12 | 6 | 8 | 9 | 95 | |||||||||
| Total | $ | 742,020 | $ | 3,788,261 | $ | 4,073,554 | $ | 910,217 | $ | 209,413 | $ | 503,362 | $ | 2,059,032 | $ | 12,285,859 | |
| Low | 7,310 | 4,950 | 7,550 | 6,201 | 5,000 | 13,650 | 16,400 | 4,950 | |||||||||
| Median | 24,025 | 73,727 | 38,800 | 48,490 | 12,824 | 41,785 | 49,789 | 38,242 | |||||||||
| High | 149,400 | 2,481,723 | 1,250,000 | 235,387 | 132,124 | 158,729 | 1,576,642 | 2,481,723 | |||||||||
| Investment Timing | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Acquisitions and Loan Funding(2) | Yield | Construction Conversions(3) | Yield | Dispositions and Loan Payoffs | Yield | ||||||||||||
| July | $ | 1,806,970 | 5.9 | % | $ | — | — | % | $ | 356,964 | 8.0 | % | |||||
| August | 256,150 | 5.7 | % | 14,745 | 5.9 | % | 64,566 | 4.2 | % | ||||||||
| September | 22,614 | 6.4 | % | 51,384 | 8.8 | % | 66,539 | 4.1 | % | ||||||||
| Total | $ | 2,085,734 | 5.9 | % | $ | 66,129 | 8.1 | % | $ | 488,069 | 7.0 | % |
Notes:
(1) Includes non-yielding asset acquisitions.
(2) Excludes land acquisitions and includes advances for non-real estate loans and excludes advances for development loans.
(3) Includes expansion conversions.
| Investment | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands at Welltower pro rata ownership, except per bed / unit / square foot) | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Gross Investment Activity | |||||||||
| Third Quarter 2021 | |||||||||
| Properties | Beds / Units / Square Feet | Investment Per<br>Bed / Unit /<br>SqFt | Pro Rata<br>Amount | Yield | |||||
| Acquisitions and Loan Funding(1) | |||||||||
| Seniors Housing Operating | 104 | 11,919 | units | $ | 149,787 | $ | 1,785,315 | ||
| Seniors Housing Triple-net | 7 | 788 | units | 202,796 | 159,803 | ||||
| Outpatient Medical | 7 | 197,383 | sf | 503 | 97,514 | ||||
| Health System | 1 | 48 | units | 427,083 | 16,400 | ||||
| Loan funding | 26,702 | ||||||||
| Total acquisitions and loan funding(2) | 119 | 2,085,734 | 5.9 | % | |||||
| Development Funding(3) | |||||||||
| Development projects: | |||||||||
| Seniors Housing Operating | 35 | 5,258 | units | 109,888 | |||||
| Seniors Housing Triple-net | 6 | 551 | units | 14,943 | |||||
| Outpatient Medical | 4 | 198,103 | sf | 13,418 | |||||
| Total development projects | 45 | 138,249 | |||||||
| Expansion projects: | |||||||||
| Seniors Housing Operating | 1 | 86 | units | 1,234 | |||||
| Outpatient Medical | 1 | 17,159 | sf | 1,971 | |||||
| Total expansion projects | 2 | 3,205 | |||||||
| Total development funding | 47 | 141,454 | 7.6 | % | |||||
| Total gross investments | 2,227,188 | 6.0 | % | ||||||
| Dispositions and Loan Payoffs(4) | |||||||||
| Seniors Housing Triple-net | 2 | 157 | units | 127,364 | 19,996 | ||||
| Outpatient Medical | 2 | 138,240 | sf | 437 | 60,440 | ||||
| Health System | 13 | 1,524 | units | 60,151 | 73,336 | ||||
| Long-Term/Post-Acute Care | 20 | 2598 | beds | 128,675 | 334,297 | ||||
| Total dispositions and loan payoffs(5) | 37 | 488,069 | 7.0 | % | |||||
| Net investments (dispositions) | $ | 1,739,119 |
Notes:
(1) Acquisitions represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions and pro rata amounts include joint venture real estate loans receivable. Loan advances represent cash funded for real estate and non-real estate loans receivable, excluding development loans.
(2) Acquisition yields represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels. Loan funding yield represents annualized contractual interest divided by investment amount.
(3) Amounts represent cash funded and capitalized interest for all developments/expansions including construction in progress, loans and in-substance real estate. Yield represents projected annualized cash rent/NOI to be generated upon conversion/stabilization divided by commitment amount.
(4) Amounts represent proceeds received for loan payoffs and consolidated and unconsolidated property sales.
(5) Yield represents annualized cash rent/interest/NOI that was being generated pre-disposition divided by proceeds. Pro rata amounts include joint venture real estate loans receivable.
| Investment | | --- || (dollars in thousands, except per bed / unit / square foot, at Welltower pro rata ownership) | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Gross Investment Activity | | | | | | | | | | | | Year-To-Date 2021 | | | | | | | | | | | Properties | Beds / Units / Square Feet | | Investment Per<br>Bed / Unit /<br>SqFt | | Pro Rata<br>Amount | | Yield | | | Acquisitions and Loan Funding(1) | | | | | | | | | | | Seniors Housing Operating | 132 | 14,059 | units | $ | 149,442 | $ | 2,032,608 | | | | Seniors Housing Triple-net | 20 | 2,209 | units | 201,068 | | 444,159 | | | | | Outpatient Medical | 10 | 544,802 | sf | 527 | | 270,240 | | | | | Health System | 2 | 96 | units | 322,917 | | 24,800 | | | | | Loan funding | | | | | | 938,154 | | | | | Total acquisitions and loan funding(2) | 164 | | | | | 3,709,961 | | 7.1 | % | | Development Funding(3) | | | | | | | | | | | Development projects: | | | | | | | | | | | Seniors Housing Operating | 38 | 5,968 | units | | | 296,774 | | | | | Seniors Housing Triple-net | 8 | 718 | units | | | 65,995 | | | | | Outpatient Medical | 7 | 339,339 | sf | | | 35,094 | | | | | Total development projects | 53 | | | | | 397,863 | | | | | Expansion projects: | | | | | | | | | | | Seniors Housing Operating | 1 | 86 | units | | | 2,908 | | | | | Outpatient Medical | 1 | 17,159 | sf | | | 3,912 | | | | | Total expansion projects | 2 | | | | | 6,820 | | | | | Total development funding | 55 | | | | | 404,683 | | 7.4 | % | | Total gross investments | | | | | | 4,114,644 | | 7.1 | % | | Dispositions and Loan Payoffs(4) | | | | | | | | | | | Seniors Housing Operating | 12 | 1,103 | units | 96,939 | | 88,693 | | | | | Seniors Housing Triple-net | 2 | 157 | units | 127,364 | | 19,996 | | | | | Outpatient Medical | 10 | 672,434 | sf | 380 | | 219,318 | | | | | Health System | 21 | 2,623 | units | 57,489 | | 120,635 | | | | | Long-Term/Post-Acute Care | 23 | 2,770 | beds | 147,761 | | 409,297 | | | | | Loan payoffs | | | | | | 387,982 | | | | | Total dispositions and loan payoffs(5) | 68 | | | | | 1,245,921 | | 6.9 | % | | Net investments (dispositions) | | | | | | $ | 2,868,723 | | |
Notes:
(1) Acquisitions represent purchase price excluding accounting adjustments pursuant to U.S. GAAP for all consolidated and unconsolidated property acquisitions and pro rata amounts include joint venture real estate loans receivable. Loan advances represent cash funded for real estate and non-real estate loans receivable, excluding development loans.
(2) Acquisition yields represents annualized contractual or projected cash rent/NOI to be generated divided by investment amount, excluding land parcels. Loan funding yield represents annualized contractual interest divided by investment amount.
(3) Amounts represent cash funded and capitalized interest for all developments/expansions including construction in progress, loans and in-substance real estate. Yield represents projected annualized cash rent/NOI to be generated upon conversion/stabilization divided by commitment amount.
(4) Amounts represent proceeds received for loan payoffs and consolidated and unconsolidated property sales.
(5) Yield represents annualized cash rent/interest/NOI that was being generated pre-disposition divided by proceeds. Pro rata amounts include joint venture real estate loans receivable.
| Investment | | --- || Property Acquisitions Detail | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | Operator | | Units | Location | | | | MSA | | Seniors Housing Operating | | | | | | | | | | Frontier Management | 95 | 2707 Clare Avenue | Bremerton | WA | US | Bremerton | | | Frontier Management | 88 | 150 Cottage Landing | Carrollton | GA | US | Atlanta | | | Frontier Management | 36 | 1510 East Commonwealth Avenue | Fullerton | CA | US | Los Angeles | | | Frontier Management | 36 | 11848 Valley View Street | Garden Grove | CA | US | Los Angeles | | | Frontier Management | 114 | 1645 Massey Road | Memphis | TX | US | Memphis | | | Frontier Management | 53 | 2305 Lingleville Highway | Stephenville | TX | US | Stephenville | | | Frontier Management | 36 | 3730 South Greenville Street | Santa Ana | CA | US | Los Angeles | | | Frontier Management | 38 | 1030 Barathaven Boulevard | Dardenne Prairie | MO | US | St. Louis | | | Frontier Management | 39 | 1801 East Natoma Street | Folsom | CA | US | Sacramento | | | Frontier Management | 50 | 8722 Winchester Road | Memphis | TN | US | Memphis | | | Frontier Management | 38 | 8525 Urbandale Avenue | Urbandale | IA | US | Des Moines | | | Atria Senior Living (1) | 11,296 | | | | | | | | Total | 11,919 | | | | | | | | Seniors Housing Triple-net | | | | | | | | | StoryPoint Senior Living | 167 | 5435 Morse Road | Gahanna | OH | US | Columbus | | | StoryPoint Senior Living | 132 | 611 Windmiller Drive | Pickerington | OH | US | Columbus | | | StoryPoint Senior Living | 89 | 3872 Attucks Drive | Powell | OH | US | Columbus | | | StoryPoint Senior Living | 126 | 10351 Sawmill Parkway | Powell | OH | US | Columbus | | | StoryPoint Senior Living | 87 | 1148 Mountain Creek Road | Chattanooga | TN | US | Chattanooga | | | StoryPoint Senior Living | 87 | 8501 South Northshore Drive | Knoxville | TN | US | Knoxville | | | StoryPoint Senior Living | 100 | 6751 West Mequon Road | Mequon | WI | US | Milwaukee | | | Total | 788 | | | | | | | | Health System | | | | | | | | | ProMedica Health System | 48 | 1853 Old Donation Parkway | Virginia Beach | VA | US | Virginia Beach | | | Outpatient Medical | Sq. Ft | | | | | | | | Aspect Health | 42,707 | 40 Old Ridgebury Road | Danbury | CT | US | Norwalk | | | Aspect Health | 26,150 | 226 White Street | Danbury | CT | US | Norwalk | | | Aspect Health | 43,201 | 2 Riverview Drive | Danbury | CT | US | Norwalk | | | Aspect Health | 25,984 | 164 Mount Pleasant Road | Newtown | CT | US | Norwalk | | | Aspect Health | 30,000 | 170 Mount Pleasant Road | Newtown | CT | US | Norwalk | | | Aspect Health | 9,713 | 131 Kent Road | New Milford | CT | US | Torrington | | | Aspect Health | 19,628 | 131 Kent Road | New Milford | CT | US | Torrington | | | Total | 197,383 | | | | | | | | (1) Please refer to the 3Q21 Welltower Facility Address List in the Investors section of our website for further details. | | | | | | | | Investment | | --- || (dollars in thousands at Welltower pro rata ownership) | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Development Summary(1) | | | | | | | | | | | | | | Unit Mix | | | | | | | | | | | Facility | Total | Independent Living | Assisted Living | | Memory Care | Commitment Amount | | Balance at 9/30/21 | | Estimated Conversion | | Seniors Housing Operating | | | | | | | | | | | | | | New York, NY | 151 | — | 69 | | 82 | $ | 99,878 | $ | 99,172 | 4Q21 | | | Beckenham, UK | 100 | — | 76 | | 24 | 47,583 | | 42,492 | | 4Q21 | | | Staten Island, NY | 95 | — | 45 | | 50 | 21,590 | | 19,039 | | 4Q21 | | | Redwood City, CA | 90 | — | 56 | | 34 | 19,465 | | 18,609 | | 4Q21 | | | Franklin Lakes, NY | 88 | — | 51 | | 37 | 16,921 | | 14,991 | | 4Q21 | | | Mountain Lakes, NJ | 90 | — | 57 | | 33 | 15,063 | | 12,729 | | 4Q21 | | | San Francisco, CA | 214 | 11 | 170 | | 33 | 110,905 | | 108,429 | | 1Q22 | | | White Plains, NY | 132 | 132 | — | | — | 59,913 | | 44,353 | | 1Q22 | | | Hendon, UK | 102 | — | 78 | | 24 | 56,069 | | 48,103 | | 1Q22 | | | Barnet, UK | 100 | — | 76 | | 24 | 52,331 | | 42,137 | | 1Q22 | | | Bellevue, WA | 110 | — | 85 | | 25 | 9,518 | | 5,034 | | 1Q22 | | | Georgetown, TX | 188 | 188 | — | | — | 35,961 | | 7,997 | | 2Q22 | | | New Rochelle, NY | 72 | — | 36 | | 36 | 41,922 | | 10,577 | | 3Q22 | | | Pflugerville, TX | 196 | 196 | — | | — | 39,224 | | 6,219 | | 3Q22 | | | Sachse, TX | 193 | 193 | — | | — | 37,788 | | 7,079 | | 3Q22 | | | Lake Jackson, TX | 130 | 130 | — | | — | 31,684 | | 3,061 | | 3Q22 | | | Princeton, NJ | 80 | — | 68 | | 12 | 29,592 | | 23,289 | | 3Q22 | | | Montreal, ON | 247 | 247 | — | | — | 16,312 | | 5,402 | | 3Q22 | | | Montreal, ON | 223 | 223 | — | | — | 13,872 | | 4,912 | | 3Q22 | | | New York, NY | 528 | 400 | 92 | | 36 | 145,864 | | 136,958 | | 4Q22 | | | Sunnyvale, CA | 90 | — | 52 | | 38 | 25,661 | | 7,797 | | 4Q22 | | | McLean, VA | 103 | — | 63 | | 40 | 24,211 | | 7,166 | | 4Q22 | | | Orange, CA | 91 | — | 49 | | 42 | 18,578 | | 5,836 | | 4Q22 | | | Coral Gables, FL | 91 | — | 55 | | 36 | 18,225 | | 5,082 | | 4Q22 | | | Livingston, NJ | 103 | — | 77 | | 26 | 17,375 | | 4,870 | | 4Q22 | | | Berea, OH | 120 | 120 | — | | — | 13,441 | | 7,281 | | 4Q22 | | | Painesville, OH | 119 | 119 | — | | — | 13,016 | | 5,263 | | 4Q22 | | | Beaver, PA | 116 | 116 | — | | — | 12,766 | | 4,285 | | 4Q22 | | | Vienna, VA | 85 | — | 49 | | 36 | 40,808 | | 9,172 | | 1Q23 | | | New York, NY | 160 | — | 76 | | 84 | 79,400 | | 44,253 | | 2Q23 | | | Weymouth, MA | 165 | 91 | 48 | | 26 | 76,188 | | 8,670 | | 3Q23 | | | Charlotte, NC | 328 | 328 | — | | — | 71,658 | | 17,342 | | 1Q24 | | | Gaithersburg, MD | 302 | 190 | 89 | | 23 | 156,150 | | 18,475 | | 2Q24 | | | Subtotal | 5,002 | 2,684 | 1,517 | | 801 | 1,468,932 | | 806,074 | | | | Seniors Housing Triple-net | | | | | | | | | | | | | | Redhill, UK | 76 | — | 46 | | 30 | 21,417 | | 17,794 | | 1Q22 | | | London, UK | 82 | — | 51 | | 31 | 43,462 | | 22,691 | | 2Q22 | | | Wombourne, UK | 66 | — | 41 | | 25 | 16,164 | | 9,394 | | 2Q22 | | | Leicester, UK | 60 | — | 36 | | 24 | 15,086 | | 8,296 | | 2Q22 | | | Rugby, UK | 76 | — | 51 | | 25 | 20,627 | | 6,868 | | 4Q22 | | | Raleigh, NC | 191 | 151 | 40 | | — | 141,853 | | 27,695 | | 2Q23 | | | Subtotal | 551 | 151 | 265 | | 135 | 258,609 | | 92,738 | | | | Outpatient Medical | | | Rentable Square Ft | Preleased % | | Health System Affiliation | Commitment Amount | | Balance at 9/30/21 | | Estimated Conversion | | | College Station, TX | | 25,200 | 100 | % | Yes | 9,025 | | 5,581 | | 4Q21 | | | Norman, OK | | 47,082 | 100 | % | Yes | 21,792 | | 2,308 | | 3Q22 | | | Tyler, TX | | 85,214 | 100 | % | Yes | 34,750 | | 7,447 | | 4Q22 | | | Subtotal | | 157,496 | | | | 65,567 | | 15,336 | | | | Total Development Projects | | | | | | | $ | 1,793,108 | $ | 914,148 | |
Note: (1) Includes development projects (construction in progress, development loans and in-substance real estate) and excludes redevelopments and expansion projects. Commitment amount represents current balances plus capitalized interest and unfunded commitments to complete development.
| Investment | | --- || (dollars in thousands at Welltower pro rata ownership) | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Development Funding Projections(1) | | | | | | | | | | | | | | | | | | | Projected Future Funding | | | | | | | | | | Projects | Beds / Units / Square Feet | Projected Yields(2) | | 2021 Funding | | Funding Thereafter | | Total Unfunded Commitments | | Committed Balances | | | Seniors Housing Operating | 33 | 5,002 | 7.5 | % | $ | 170,593 | $ | 492,265 | $ | 662,858 | $ | 1,468,932 | | Seniors Housing Triple-net | 6 | 551 | 7.2 | % | 35,234 | | 130,637 | | 165,871 | | 258,609 | | | Outpatient Medical | 3 | 157,496 | 6.3 | % | 15,218 | | 35,013 | | 50,231 | | 65,567 | | | Total | 42 | | 7.4 | % | $ | 221,045 | $ | 657,915 | $ | 878,960 | $ | 1,793,108 | | Development Project Conversion Estimates(1) | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Quarterly Conversions | | | | | Annual Conversions | | | | | | | Amount | | Projected<br><br>Yields(2) | | | Amount | | Projected<br><br>Yields(2) | | | 1Q21 actual | $ | 173,792 | 6.2 | % | 2021 actual | $ | 435,727 | 7.6 | % | | 2Q21 actual | 195,806 | | 8.7 | % | 2021 estimate | 229,525 | | 8.3 | % | | 3Q21 actual | 66,129 | | 8.1 | % | 2022 estimate | 997,526 | | 7.0 | % | | 4Q21 estimate | 229,525 | | 8.3 | % | 2023 estimate | 338,249 | | 7.9 | % | | 1Q22 estimate | 310,153 | | 7.5 | % | 2024 estimate | 227,808 | | 7.8 | % | | 2Q22 estimate | 110,673 | | 6.4 | % | Total | $ | 2,228,835 | 7.5 | % | | 3Q22 estimate | 232,186 | | 6.9 | % | | | | | | | 4Q22 estimate | 344,514 | | 6.7 | % | | | | | | | 1Q23 estimate | 40,808 | | 8.2 | % | | | | | | | 2Q23 estimate | 221,253 | | 7.8 | % | | | | | | | 3Q23 estimate | 76,188 | | 8.0 | % | | | | | | | 1Q24 estimate | 71,658 | | 5.8 | % | | | | | | | 2Q24 estimate | 156,150 | | 8.7 | % | | | | | | | Total | $ | 2,228,835 | 7.5 | % | | | | | | | Unstabilized Properties | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | 6/30/2021 Properties | Stabilizations | Construction Conversions(3) | Acquisitions/ Dispositions | 9/30/2021 Properties | Beds / Units | | Seniors Housing Operating | 33 | (3) | 2 | — | 32 | 4,650 | | Seniors Housing Triple-net | 15 | — | — | 5 | 20 | 2,215 | | Total | 48 | (3) | 2 | 5 | 52 | 6,865 || Occupancy | 6/30/2021 Properties | Stabilizations | Construction Conversions(3) | | Acquisitions/ Dispositions | | Progressions | | 9/30/2021 Properties | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 0% - 50% | 28 | — | 2 | | 5 | | (2) | | 33 | | | 50% - 70% | 15 | (1) | — | | — | | — | | 14 | | | 70% + | 5 | (2) | — | | — | | 2 | | 5 | | | Total | 48 | (3) | 2 | | 5 | | — | | 52 | | | Occupancy | 9/30/2021 Properties | Months In Operation | Revenues | | % of Total Revenues(4) | | Gross Investment Balance | | % of Total Gross Investment | | | 0% - 50% | 33 | 7 | $ | 48,046 | 1.0 | % | $ | 918,394 | 2.4 | % | | 50% - 70% | 14 | 15 | 57,760 | | 1.2 | % | 464,102 | | 1.2 | % | | 70% + | 5 | 27 | 17,737 | | 0.4 | % | 119,402 | | 0.3 | % | | Total | 52 | 11 | $ | 123,543 | 2.6 | % | $ | 1,501,898 | 3.9 | % |
Notes:
(1) Includes development projects (construction in progress, development loans and in-substance real estate) and excludes expansion projects.
(2) Actual yields may vary.
(3) Includes expansion and development loan conversions.
(4) Percent of total revenues based on current quarter annualized pro rata total revenues on page 15.
| Financial | |||||
|---|---|---|---|---|---|
| (dollars in thousands at Welltower pro rata ownership) | |||||
| --- | --- | --- | --- | --- | --- |
| Components of NAV | |||||
| Stabilized NOI | Pro rata beds/units/square feet | ||||
| Seniors Housing Operating(1) | $ | 685,716 | 71,675 | units | |
| Seniors Housing Triple-net | 410,524 | 25,766 | units | ||
| Outpatient Medical | 417,788 | 17,256,094 | square feet | ||
| Health System | 161,732 | 19,086 | units/beds | ||
| Long-Term/Post-Acute Care | 95,076 | 7,984 | beds | ||
| Total In-Place NOI(2) | 1,770,836 | ||||
| Incremental stabilized NOI(3) | 84,908 | ||||
| Total stabilized NOI | $ | 1,855,744 | |||
| Obligations | |||||
| Lines of credit and commercial paper(4) | $ | 291,000 | |||
| Senior unsecured notes(4) | 11,208,344 | ||||
| Secured debt(4) | 3,050,725 | ||||
| Financing lease liabilities | 110,244 | ||||
| Total debt | $ | 14,660,313 | |||
| Add (Subtract): | |||||
| Other liabilities (assets), net(5) | $ | 371,433 | |||
| Cash and cash equivalents and restricted cash | (362,645) | ||||
| Net obligations | $ | 14,669,101 | |||
| Other Assets | |||||
| Land parcels | $ | 196,129 | Effective Interest Rate(8) | ||
| Real estate loans receivable(6) | 1,151,813 | 11.2% | |||
| Non real estate loans receivable(7) | 210,822 | 11.4% | |||
| Joint venture real estate loans receivables(9) | 247,460 | 5.2% | |||
| Other investments(10) | 9,312 | ||||
| Investments held for sale(11) | 283,031 | ||||
| Development properties:(12) | |||||
| Current balance | 920,968 | ||||
| Unfunded commitments | 880,763 | ||||
| Committed balances | $ | 1,801,731 | |||
| Projected yield | 7.4 | % | |||
| Projected NOI | $ | 133,328 | |||
| Common Shares Outstanding(13) | 436,670 |
Notes:
(1) Includes $10,033,000 attributable to our proportional share of income from unconsolidated management company investments.
(2) See page 21 for reconciliation.
(3) Represents incremental NOI from Seniors Housing Operating unstabilized properties.
(4) Represents principal amounts due and do not include unamortized premiums/discounts, deferred loan expenses or other fair value adjustments as reflected on the balance sheet. Includes $1,154,547,000 of foreign secured debt.
(5) Includes liabilities / (assets) that impact cash or NOI and excludes non real estate loans and non-cash items such as the following (in thousands):
| Unearned revenues | $ | 134,651 |
|---|---|---|
| Below market tenant lease intangibles, net | 31,599 | |
| Deferred taxes, net | (37,175) | |
| Intangible assets, net | (42,825) | |
| Other non-cash liabilities / (assets), net | 6,643 | |
| Total non-cash liabilities/(assets), net | $ | 92,893 |
(6) Represents $1,124,460,000 of real estate loans, excluding development loans and including certain in substance real estate developments and held to maturity debt securities, and net of $14,801,000 of credit allowances.
(7) Represents $360,520,000 of non-real estate loans, net of $149,698,000 of credit allowances.
(8) Average cash-pay interest rates are 6.8% and 2.2% for real estate and non-real estate loans, respectively. Rates exclude non-accrual/interest-free loans.
(9) Represents partners' share of Welltower loans made to our partners in select joint ventures, secured by their interest in the joint venture properties.
(10) Represents the fair value of Genesis Healthcare, Inc. stock investment based on closing stock price at September 30, 2021 and estimated fair value of a 3.4% ownership in a 34 property Seniors Housing Operating portfolio excluded from IPNOI.
(11) Represents expected proceeds from assets held for sale.
(12) See pages 12-13. Also includes expansion projects.
(13) Includes redeemable OP units.
| Financial | | --- || (dollars in thousands at Welltower pro rata ownership) | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Net Operating Income(1) | | | | | | | | | | | | | 3Q20 | | 4Q20 | | 1Q21 | | 2Q21 | | 3Q21 | | | Revenues: | | | | | | | | | | | | Seniors Housing Operating | | | | | | | | | | | | Resident fees and services | $ | 725,043 | $ | 701,590 | $ | 708,026 | $ | 726,516 | $ | 809,930 | | Interest income | 113 | | 313 | | 1,125 | | 859 | | 1,117 | | | Other income | 977 | | 1,136 | | 1,967 | | 860 | | 1,049 | | | Total revenues | 726,133 | | 703,039 | | 711,118 | | 728,235 | | 812,096 | | | Seniors Housing Triple-net | | | | | | | | | | | | Rental income | 92,572 | | 115,604 | | 57,328 | | 108,612 | | 114,039 | | | Interest income | 6,552 | | 6,763 | | 6,660 | | 28,885 | | 32,153 | | | Other income | 930 | | 1,503 | | 913 | | 1,357 | | 901 | | | Total revenues | 100,054 | | 123,870 | | 64,901 | | 138,854 | | 147,093 | | | Outpatient Medical | | | | | | | | | | | | Rental income | 169,007 | | 160,981 | | 151,688 | | 150,781 | | 157,474 | | | Interest income | 760 | | 4,226 | | 3,538 | | 4,731 | | 472 | | | Other income | 966 | | 1,472 | | 1,936 | | 5,002 | | 2,057 | | | Total revenues | 170,733 | | 166,679 | | 157,162 | | 160,514 | | 160,003 | | | Health System | | | | | | | | | | | | Rental income | 42,445 | | 42,445 | | 42,445 | | 46,554 | | 46,204 | | | Total revenues | 42,445 | | 42,445 | | 42,445 | | 46,554 | | 46,204 | | | Long-Term/Post-Acute Care | | | | | | | | | | | | Rental income | (46,789) | | 54,272 | | 49,761 | | 40,542 | | 32,255 | | | Interest income | 9,325 | | 9,794 | | 8,256 | | 3,973 | | 6,122 | | | Other income | 190 | | 9 | | 186 | | — | | 184 | | | Total revenues | (37,274) | | 64,075 | | 58,203 | | 44,515 | | 38,561 | | | Corporate | | | | | | | | | | | | Other income | 2,966 | | 3,095 | | 3,129 | | 2,672 | | 3,362 | | | Total revenues | 2,966 | | 3,095 | | 3,129 | | 2,672 | | 3,362 | | | Total | | | | | | | | | | | | Rental income | 257,235 | | 373,302 | | 301,222 | | 346,489 | | 349,972 | | | Resident fees and services | 725,043 | | 701,590 | | 708,026 | | 726,516 | | 809,930 | | | Interest income | 16,750 | | 21,096 | | 19,579 | | 38,448 | | 39,864 | | | Other income | 6,029 | | 7,215 | | 8,131 | | 9,891 | | 7,553 | | | Total revenues | 1,005,057 | | 1,103,203 | | 1,036,958 | | 1,121,344 | | 1,207,319 | | | Property operating expenses: | | | | | | | | | | | | Seniors Housing Operating | 550,755 | | 539,465 | | 539,058 | | 584,484 | | 644,241 | | | Seniors Housing Triple-net | 7,353 | | 9,110 | | 7,758 | | 7,871 | | 7,927 | | | Outpatient Medical | 52,312 | | 50,231 | | 47,764 | | 46,184 | | 48,796 | | | Health System | 20 | | 20 | | 20 | | 54 | | 64 | | | Long-Term/Post-Acute Care | 5,107 | | 5,728 | | 5,279 | | 4,848 | | 3,859 | | | Corporate | 1,718 | | 1,663 | | 1,654 | | 2,174 | | 3,054 | | | Total property operating expenses | 617,265 | | 606,217 | | 601,533 | | 645,615 | | 707,941 | | | Net operating income: | | | | | | | | | | | | Seniors Housing Operating | 175,378 | | 163,574 | | 172,060 | | 143,751 | | 167,855 | | | Seniors Housing Triple-net | 92,701 | | 114,760 | | 57,143 | | 130,983 | | 139,166 | | | Outpatient Medical | 118,421 | | 116,448 | | 109,398 | | 114,330 | | 111,207 | | | Health System | 42,425 | | 42,425 | | 42,425 | | 46,500 | | 46,140 | | | Long-Term/Post-Acute Care | (42,381) | | 58,347 | | 52,924 | | 39,667 | | 34,702 | | | Corporate | 1,248 | | 1,432 | | 1,475 | | 498 | | 308 | | | Net operating income | $ | 387,792 | $ | 496,986 | $ | 435,425 | $ | 475,729 | $ | 499,378 |
Note:
(1) Please see discussion of Supplemental Reporting Measures on page 20. Includes amounts from investments sold or held for sale. NOI related to DownREITs included at 100%. Excludes NOI related to a leasehold portfolio interest for 26 properties assumed by a wholly-owned affiliate in conjunction with the Holiday Retirement transaction. Subsequent to the initial transaction, we purchased eight of the leased properties and one of the properties was sold by the landlord and removed from the lease. No rent will be paid in excess of net cash flow relating to the leasehold properties and therefore, the leasehold interests have been excluded from NOI and relevant metrics such as property count, unit count, IPNOI. same store NOI, REVPOR and same store REVPOR.
| Financial | | --- || (dollars in thousands) | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | Leverage and EBITDA Reconciliations(1) | | | | | | | | | Twelve Months Ended | | | Three Months Ended | | | | | September 30, 2021 | | | September 30, 2021 | | | | Net income (loss) | $ | 463,563 | | $ | 190,336 | | | Interest expense | 489,178 | | | 122,522 | | | | Income tax expense (benefit) | 6,952 | | | 4,940 | | | | Depreciation and amortization | 995,798 | | | 267,754 | | | | EBITDA | 1,955,491 | | | 585,552 | | | | Loss (income) from unconsolidated entities | 10,501 | | | 15,832 | | | | Stock-based compensation(2) | 22,248 | | | 4,535 | | | | Loss (gain) on extinguishment of debt, net | 64,760 | | | (5) | | | | Loss (gain) on real estate dispositions, net | (409,166) | | | (119,954) | | | | Impairment of assets | 58,067 | | | 1,490 | | | | Provision for loan losses, net | 90,394 | | | (271) | | | | Loss (gain) on derivatives and financial instruments, net | (5,934) | | | (8,078) | | | | Other expenses(2) | 52,960 | | | 3,519 | | | | Leasehold interest adjustment(3) | (640) | | | (640) | | | | Casualty losses, net of recoveries(4) | 998 | | | 998 | | | | Other impairment(5) | 49,241 | | | — | | | | Total adjustments | (66,571) | | | (102,574) | | | | Adjusted EBITDA | $ | 1,888,920 | | $ | 482,978 | | | Interest Coverage Ratios | | | | | | | | Interest expense | $ | 489,178 | | $ | 122,522 | | | Capitalized interest | 18,265 | | | 4,669 | | | | Non-cash interest expense | (14,163) | | | (5,461) | | | | Total interest | $ | 493,280 | | $ | 121,730 | | | EBITDA | $ | 1,955,491 | | $ | 585,552 | | | Interest coverage ratio | 3.96 | | x | 4.81 | | x | | Adjusted EBITDA | $ | 1,888,920 | | $ | 482,978 | | | Adjusted Interest coverage ratio | 3.83 | | x | 3.97 | | x | | Fixed Charge Coverage Ratios | | | | | | | | Total interest | $ | 493,280 | | $ | 121,730 | | | Secured debt principal amortization | 64,832 | | | 17,040 | | | | Total fixed charges | $ | 558,112 | | $ | 138,770 | | | EBITDA | $ | 1,955,491 | | $ | 585,552 | | | Fixed charge coverage ratio | 3.50 | | x | 4.22 | | x | | Adjusted EBITDA | $ | 1,888,920 | | $ | 482,978 | | | Adjusted Fixed charge coverage ratio | 3.38 | | x | 3.48 | | x | | Net Debt to EBITDA Ratios | | | | | | | | Total debt(6) | | | | $ | 13,779,652 | | | Less: cash and cash equivalents(7) | | | | (307,385) | | | | Net debt | | | | $ | 13,472,267 | | | EBITDA Annualized | | | | $ | 2,342,208 | | | Net debt to EBITDA ratio | | | | 5.75 | | x | | Adjusted EBITDA Annualized | | | | $ | 1,931,912 | | | Net debt to Adjusted EBITDA ratio | | | | 6.97 | | x |
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 20.
(2) Certain severance-related costs are included in stock-based compensation and excluded from other expenses.
(3) Represents $13,214,000 of revenues and $12,574,000 of property operating expenses associated with a leasehold portfolio interest relating to 26 properties assumed by a wholly-owned affiliate in conjunction with the Holiday Retirement transaction. Subsequent to the initial transaction, we purchased eight of the leased properties and one of the properties was sold by the landlord and removed from the lease. No rent will be paid in excess of net cash flow relating to the leasehold properties and therefore, the net impact has been excluded from Adjusted EBITDA.
(4) Represents casualty losses net of any insurance recoveries.
(5) Amounts relate to reserve for straight-line rent receivable balances for leases placed on cash recognition.
(6) Includes unamortized premiums/discounts, other fair value adjustments and financing lease liabilities of $110,244,000. Excludes operating lease liabilities of $434,303,000 related to ASC 842 adoption.
(7) Inclusive of IRC Section 1031 deposits, if any.
| Financial | ||||
|---|---|---|---|---|
| (in thousands except share price) | ||||
| --- | --- | --- | --- | --- |
| Leverage and Current Capitalization(1) | ||||
| % of Total | ||||
| Book Capitalization | ||||
| Lines of credit and commercial paper(2) | $ | 290,996 | 0.92 | % |
| Long-term debt obligations(2)(3) | 13,488,656 | 42.62 | % | |
| Cash and cash equivalents(4) | (307,385) | (0.97) | % | |
| Net debt to consolidated book capitalization | $ | 13,472,267 | 42.57 | % |
| Total equity(5) | 18,172,111 | 57.43 | % | |
| Consolidated book capitalization | $ | 31,644,378 | 100.00 | % |
| Joint venture debt, net(6) | 780,944 | |||
| Total book capitalization | $ | 32,425,322 | ||
| Undepreciated Book Capitalization | ||||
| Lines of credit and commercial paper(2) | $ | 290,996 | 0.76 | % |
| Long-term debt obligations(2)(3) | 13,488,656 | 35.24 | % | |
| Cash and cash equivalents(4) | (307,385) | (0.80) | % | |
| Net debt to consolidated undepreciated book capitalization | $ | 13,472,267 | 35.20 | % |
| Accumulated depreciation and amortization | 6,634,061 | 17.33 | % | |
| Total equity(5) | 18,172,111 | 47.47 | % | |
| Consolidated undepreciated book capitalization | $ | 38,278,439 | 100.00 | % |
| Joint venture debt, net(6) | 780,944 | |||
| Total undepreciated book capitalization | $ | 39,059,383 | ||
| Enterprise Value | ||||
| Lines of credit and commercial paper(2) | $ | 290,996 | 0.57 | % |
| Long-term debt obligations(2)(3) | 13,488,656 | 26.63 | % | |
| Cash and cash equivalents(4) | (307,385) | (0.61) | % | |
| Net debt to consolidated enterprise value | $ | 13,472,267 | 26.60 | % |
| Common shares outstanding | 435,274 | |||
| Period end share price | 82.40 | |||
| Common equity market capitalization | $ | 35,866,578 | 70.82 | % |
| Noncontrolling interests(5) | 1,308,908 | 2.58 | % | |
| Consolidated enterprise value | $ | 50,647,753 | 100.00 | % |
| Joint venture debt, net(6) | 780,944 | |||
| Total enterprise value | $ | 51,428,697 | ||
| Secured Debt as % of Total Assets | ||||
| Secured debt(2) | $ | 2,262,345 | 6.76 | % |
| Total assets | $ | 33,480,025 | ||
| Total Debt as % of Total Assets | ||||
| Total debt(2)(3) | $ | 13,779,652 | 41.16 | % |
| Total assets | $ | 33,480,025 | ||
| Unsecured Debt as % of Unencumbered Assets | ||||
| Unsecured debt(2) | $ | 11,407,063 | 35.45 | % |
| Unencumbered assets | $ | 32,179,053 |
Notes:
(1) Please see discussion of Supplemental Reporting Measures on page 20.
(2) Amounts include unamortized premiums/discounts and other fair value adjustments as reflected on the balance sheet.
(3) Includes financing lease liabilities of $110,244,000 and excludes operating lease liabilities of $434,303,000 related to ASC 842 adoption.
(4) Inclusive of IRC Section 1031 deposits, if any.
(5) Includes all noncontrolling interests (redeemable and permanent) as reflected on our balance sheet.
(6) Net of Welltower's share of unconsolidated debt and minority partners' share of Welltower consolidated debt.
| Financial | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Debt Maturities and Principal Payments(1) | ||||||||||||||||||||||||
| Year | Lines of Credit and Commercial Paper(2) | Senior Unsecured Notes(3,4,5,6) | Consolidated Secured Debt | Share of Unconsolidated Secured Debt | Noncontrolling Interests' Share of Consolidated Secured Debt | Combined Debt(7) | % of Total | Wtd. Avg. Interest Rate | ||||||||||||||||
| 2021 | $ | 240,000 | $ | — | $ | 211,978 | $ | 37,622 | $ | (39,260) | $ | 450,340 | 3.10 | % | 1.67 | % | ||||||||
| 2022 | — | — | 481,702 | 108,970 | (69,870) | 520,802 | 3.58 | % | 3.27 | % | ||||||||||||||
| 2023 | — | 697,270 | 504,855 | 145,906 | (134,472) | 1,213,559 | 8.34 | % | 2.41 | % | ||||||||||||||
| 2024 | — | 1,350,000 | 183,192 | 133,585 | (24,598) | 1,642,179 | 11.29 | % | 3.83 | % | ||||||||||||||
| 2025 | — | 1,260,000 | 178,544 | 500,193 | (33,169) | 1,905,568 | 13.10 | % | 3.82 | % | ||||||||||||||
| 2026 | 51,000 | 700,000 | 88,834 | 21,027 | (24,734) | 836,127 | 5.75 | % | 4.05 | % | ||||||||||||||
| 2027 | — | 736,724 | 163,805 | 65,821 | (45,027) | 921,323 | 6.33 | % | 2.95 | % | ||||||||||||||
| 2028 | — | 1,490,850 | 76,232 | 27,033 | (13,211) | 1,580,904 | 10.87 | % | 4.48 | % | ||||||||||||||
| 2029 | — | 1,050,000 | 247,298 | 36,530 | (1,935) | 1,331,893 | 9.15 | % | 3.13 | % | ||||||||||||||
| 2030 | — | 750,000 | 5,935 | 32,039 | (1,136) | 786,838 | 5.41 | % | 3.07 | % | ||||||||||||||
| Thereafter | — | 3,173,500 | 127,406 | 96,049 | (36,419) | 3,360,536 | 23.08 | % | 4.11 | % | ||||||||||||||
| Totals | $ | 291,000 | $ | 11,208,344 | $ | 2,269,781 | $ | 1,204,775 | $ | (423,831) | $ | 14,550,069 | 100.00 | % | ||||||||||
| Weighted Avg. Interest Rate(8) | 0.73 | % | 3.71 | % | 3.10 | % | 3.28 | % | 2.86 | % | 3.54 | % | ||||||||||||
| Weighted Avg. Maturity Years | 0.8 | (2) | 7.9 | 3.7 | 5.8 | 3.5 | 7.1 | (2) | ||||||||||||||||
| % Floating Rate Debt | 100.00 | % | 6.31 | % | 33.01 | % | 33.37 | % | 41.18 | % | 13.57 | % | ||||||||||||
| Debt by Local Currency(1) | ||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||
| Lines of Credit and Commercial Paper(2) | Senior Unsecured Notes(3,4,5,6) | Consolidated Secured Debt | Share of Unconsolidated Secured Debt | Noncontrolling Interests' Share of Consolidated Secured Debt | Combined Debt(7) | Investment Hedges(9) | ||||||||||||||||||
| United States | $ | 291,000 | $ | 9,360,000 | $ | 1,191,336 | $ | 885,460 | $ | (180,618) | $ | 11,547,178 | $ | — | ||||||||||
| United Kingdom | — | 1,414,350 | — | — | — | 1,414,350 | 2,565,642 | |||||||||||||||||
| Canada | — | 433,994 | 1,078,445 | 319,315 | (243,213) | 1,588,541 | 493,174 | |||||||||||||||||
| Totals | $ | 291,000 | $ | 11,208,344 | $ | 2,269,781 | $ | 1,204,775 | $ | (423,831) | $ | 14,550,069 | $ | 3,058,816 |
Notes:
(1) Represents principal amounts due excluding unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) The 2021 maturity reflects the $240,000,000 in principal outstanding on our unsecured commercial paper program as of as of September 30, 2021. The unsecured revolving credit facility is comprised of a $1,000,000,000 tranche that matures on June 4, 2023 (none outstanding at September 30, 2021) and a $3,000,000,000 tranche that matures on June 4, 2025 ($51,000,000 outstanding at September 30, 2021). Both tranches may be extended for two successive terms of six month at our option. These borrowings reduce the available borrowing capacity of our unsecured revolving credit facility to $3,709,000,000 as of September 30, 2021. If the commercial paper was refinanced using the unsecured revolving credit facility, the weighted average years to maturity of our combined debt would be 7.2 years with extensions.
(3) 2023 includes a $500,000,000 unsecured term loan and a CAD $250,000,000 unsecured term loan (approximately $197,270,000 USD at September 30, 2021). The loans mature on July 19, 2023. The interest rates on the loans are LIBOR + 0.9% for USD and CDOR + 0.9% for CAD.
(4) 2027 includes CAD $300,000,000 of 2.95% senior unsecured notes (approximately $236,724,000 USD at September 30, 2021) that matures on January 15, 2027.
(5) 2028 includes £550,000,000 of 4.80% senior unsecured notes (approximately $740,850,000 USD at September 30, 2021). The notes mature on November 20, 2028.
(6) Thereafter includes £500,000,000 of 4.50% senior unsecured notes (approximately $673,500,000 USD at September 30, 2021). The notes mature on December 1, 2034.
(7) Excludes operating lease liabilities of $434,303,000 and finance lease liabilities of $110,244,000 related to ASC 842 adoption.
(8) The interest rate on the unsecured revolving credit facility is 1-month LIBOR + 0.775%. Commercial paper, senior notes and secured debt average interest rate represents the face value note rate.
(9) Represents notional value of foreign currency derivative contracts at end of period spot FX rates. The fair market value of the gains (losses) of these contracts is currently USD $(8,078,000), as represented in other assets (liabilities) on the balance sheet. We supplement our local currency debt with foreign currency derivative contracts to offset the translation and economic exposures related to our international investments. Currently, our foreign currency derivatives are comprised of forward contracts and cross-currency swaps.
| Glossary |
|---|
Age: Current year, less the year built, adjusted for major renovations. Average age is weighted by pro rata NOI.
Cap-ex, Tenant Improvements, Leasing Commissions: Represents amounts incurred for: 1) recurring and non-recurring capital expenditures required to maintain and re-tenant our properties; 2) second generation tenant improvements; and 3) leasing commissions paid to third party leasing agents to secure new tenants.
Construction Conversion: Represents completed construction projects that were placed into service and began generating NOI.
EBITDAR: Earnings before interest, taxes, depreciation, amortization and rent. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate EBITDAR and has not independently verified the information.
EBITDAR Coverage: Represents the ratio of EBITDAR to contractual rent for leases or interest and principal payments for loans. EBITDAR coverage is a measure of a property’s ability to generate sufficient cash flows for the operator/borrower to pay rent and meet other obligations. The coverage shown excludes properties that are unstabilized, closed or for which data is not available or meaningful.
EBITDARM: Earnings before interest, taxes, depreciation, amortization, rent and management fees. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate EBITDARM and has not independently verified the information.
EBITDARM Coverage: Represents the ratio of EBITDARM to contractual rent for leases or interest and principal payments for loans. EBITDARM coverage is a measure of a property’s ability to generate sufficient cash flows for the operator/borrower to pay rent and meet other obligations, assuming that management fees are not paid. The coverage shown excludes properties that are unstabilized, closed or for which data is not available or meaningful.
Health System: Includes independent, assisted living, dementia care and long-term post-acute care properties subject to triple-net operating leases to or guaranteed by investment-grade health systems.
Health System - Affiliated: Outpatient medical properties are considered affiliated with a health system if one or more of the following conditions are met: 1) the land parcel is contained within the physical boundaries of a hospital campus; 2) the land parcel is located adjacent to the campus; 3) the building is physically connected to the hospital regardless of the land ownership structure; 4) a ground lease is maintained with a health system entity; 5) a master lease is maintained with a health system entity; 6) significant square footage is leased to a health system entity; 7) the property includes an ambulatory surgery center with a hospital partnership interest; or (8) a significant square footage is leased to a physician group that is either employed, directly or indirectly by a health system, or has a significant clinical and financial affiliation with the health system.
Long-Term/Post-Acute Care: Includes all skilled nursing, rehabilitation and long-term acute-care facilities where the majority of individuals require 24-hour nursing or medical care. Generally, these properties are licensed for Medicaid and/or Medicare reimbursement and are subject to triple-net operating leases. Most of these facilities focus on higher acuity patients and offer rehabilitation units specializing in cardiac, orthopedic, dialysis, neurological or pulmonary rehabilitation.
MSA: For the United States and Canada, we use the Metropolitan Statistical Area as defined by the U.S. Census Bureau and the Census Metropolitan Areas as defined by Statistics Canada, respectively. For the United Kingdom, we generally use the Metro Region as defined by EuroStat with Greater London defined as a 55-mile radius around the city’s center.
Occupancy: Outpatient Medical occupancy represents the percentage of total rentable square feet leased and occupied, including month-to-month leases, as of the date reported. Occupancy for all other property types represents average quarterly operating occupancy based on the most recent quarter of available data and excludes properties that are unstabilized, closed or for which data is not available or meaningful. The company uses unaudited, periodic financial information provided solely by tenants/borrowers to calculate occupancy and has not independently verified the information. Occupancy metrics are reflected at our pro rata share.
Outpatient Medical: Outpatient medical buildings include properties offering ambulatory medical services such as primary and secondary care, outpatient surgery, diagnostic procedures and rehabilitation. These properties are typically affiliated with a health system and may be located on a hospital campus. They are specifically designed and constructed for use by health care professionals to provide services to patients. They also include medical office buildings that typically contain sole and group physician practices and may provide laboratory and other specialty services.
Seniors Housing Operating (SHO): Includes independent, assisted living and dementia care properties in the U.S. and Canada and all care homes in the U.K. structured to take advantage of the REIT Investment Diversification and Empowerment Act of 2007.
Seniors Housing Triple-net (SH-NNN): Includes independent, assisted living, and dementia care properties in the U.S. and Canada and all care homes in the U.K. subject to triple-net operating leases and loans receivable.
Square Feet: Net rentable square feet calculated utilizing Building Owners and Managers Association measurement standards.
Stable: Generally, a triple-net rental property is considered stable (versus unstabilized or under development) when it has achieved EBITDAR coverage of 1.00x or greater for three consecutive months or, if targeted performance has not been achieved, 12 months following the budgeted stabilization date. Triple-net properties for which income is recognized on a cash basis and for which substantially all contractual rent during the period has not been collected are excluded from the stable portfolio. A Seniors Housing Operating facility is considered stable upon the earliest of 90% occupancy, NOI at or above the underwritten target or 12 months past the underwritten stabilization date. Excludes assets held for sale and assets disposed of during the current quarter.
Unstabilized: An acquisition that does not meet the stable criteria upon closing or a construction property that has opened but not yet reached stabilization.
| Supplemental Reporting Measures |
|---|
We believe that revenues and net income, as defined by U.S. generally accepted accounting principles ("U.S. GAAP"), are the most appropriate earnings measurements. However, we consider EBITDA, Adjusted EBITDA, REVPOR, SS REVPOR, NOI, In-Place NOI ("IPNOI") and SSNOI to be useful supplemental measures of our operating performance. Excluding EBITDA and Adjusted EBITDA, these supplemental measures are disclosed on our pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners’ noncontrolling ownership interests and adding our minority ownership share of unconsolidated amounts. We do not control unconsolidated investments. While we consider pro rata disclosures useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution.
We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. IPNOI represents NOI excluding interest income, other income and non-IPNOI and adjusted for timing of current quarter portfolio changes such as acquisitions, development conversions, segment transitions, dispositions and investments held for sale. SSNOI is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in the same store amounts five full quarters after acquisition or being placed into service. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the period, are excluded from the same store amounts. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from the same store amounts until five full quarters post completion of the redevelopment. Properties undergoing operator transitions and/or segment transitions are also excluded from the same store amounts until five full quarters post completion of the operator transition or segment transition. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from same store amounts until five full quarters after the properties are placed back into service. SSNOI excludes non-cash NOI and includes adjustments to present consistent property ownership percentages and to translate Canadian properties and UK properties using a consistent exchange rate. Normalizers include adjustments that in management’s opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in our financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceed 0.50% of SSNOI growth per property type) are separately disclosed and explained. We believe NOI, IPNOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI, IPNOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties.
REVPOR represents the average revenues generated per occupied room per month at our Seniors Housing Operating properties. It is calculated as our pro rata version of total resident fees and services revenues from the income statement divided by average monthly occupied room days. SS REVPOR is used to evaluate the REVPOR performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. It is based on the same pool of properties used for SSNOI and includes any revenue normalizations used for SSNOI. We use REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of our Seniors Housing Operating portfolio independent of fluctuating occupancy rates. They are also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our Seniors Housing Operating portfolio.
We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and Internal Revenue Code (“IRC”) Section 1031 deposits. We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The ratios are based on EBITDA and Adjusted EBITDA. EBITDA is defined as earnings (net income per income statement) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses/impairments on properties, gains/losses on derivatives and financial instruments, other expenses, other impairment charges and other adjustments deemed appropriate in management's opinion. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted EBITDA divided by fixed charges. Fixed charges include total interest and secured debt principal amortization. Our leverage ratios include net debt to Adjusted EBITDA, book capitalization, undepreciated book capitalization and market capitalization. Book capitalization represents the sum of net debt (defined as total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and any IRC Section 1031 deposits), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Market capitalization represents book capitalization adjusted for the fair market value of our common stock. Our leverage ratios are defined as the proportion of net debt to total capitalization.
Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. None of the supplemental reporting measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Multi-period amounts may not equal the sum of the individual quarterly amounts due to rounding.
| Supplemental Reporting Measures | | --- || (dollars in thousands) | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Non-GAAP Reconciliations | | | | | | | | | | | | NOI Reconciliation | 3Q20 | | 4Q20 | | 1Q21 | | 2Q21 | | 3Q21 | | | Net income (loss) | $ | 394,978 | $ | 155,278 | $ | 72,192 | $ | 45,757 | $ | 190,336 | | Loss (gain) on real estate dispositions, net | (484,304) | | (185,464) | | (59,080) | | (44,668) | | (119,954) | | | Loss (income) from unconsolidated entities | 5,981 | | (258) | | (13,049) | | 7,976 | | 15,832 | | | Income tax expense (benefit) | 2,003 | | 290 | | 3,943 | | (2,221) | | 4,940 | | | Other expenses | 11,544 | | 33,088 | | 10,994 | | 11,687 | | 3,575 | | | Impairment of assets | 23,313 | | 9,317 | | 23,568 | | 23,692 | | 1,490 | | | Provision for loan losses, net | 2,857 | | 83,085 | | 1,383 | | 6,197 | | (271) | | | Loss (gain) on extinguishment of debt, net | 33,004 | | 13,796 | | (4,643) | | 55,612 | | (5) | | | Loss (gain) on derivatives and financial instruments, net | 1,395 | | 569 | | 1,934 | | (359) | | (8,078) | | | General and administrative expenses | 31,003 | | 27,848 | | 29,926 | | 31,436 | | 32,256 | | | Depreciation and amortization | 255,532 | | 242,733 | | 244,426 | | 240,885 | | 267,754 | | | Interest expense | 124,851 | | 121,173 | | 123,142 | | 122,341 | | 122,522 | | | Consolidated net operating income | 402,157 | | 501,455 | | 434,736 | | 498,335 | | 510,397 | | | NOI attributable to unconsolidated investments(1) | 13,659 | | 21,481 | | 21,516 | | 21,180 | | 20,042 | | | NOI attributable to noncontrolling interests(2) | (28,024) | | (25,950) | | (20,827) | | (43,786) | | (31,061) | | | Pro rata net operating income (NOI)(3) | $ | 387,792 | $ | 496,986 | $ | 435,425 | $ | 475,729 | $ | 499,378 | | In-Place NOI Reconciliation | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | At Welltower pro rata ownership | Seniors Housing Operating | | Seniors Housing Triple-net | | Outpatient Medical | | Health System | | Long-Term<br>/Post-Acute Care | | Corporate | | Total | | | Revenues | $ | 812,096 | $ | 147,093 | $ | 160,003 | $ | 46,204 | $ | 38,561 | $ | 3,362 | $ | 1,207,319 | | Property operating expenses | (644,241) | | (7,927) | | (48,796) | | (64) | | (3,859) | | (3,054) | | (707,941) | | | NOI(3) | 167,855 | | 139,166 | | 111,207 | | 46,140 | | 34,702 | | 308 | | 499,378 | | | Adjust: | | | | | | | | | | | | | | | | Interest income | (1,117) | | (32,153) | | (472) | | — | | (6,122) | | — | | (39,864) | | | Other income | (1,049) | | (901) | | (2,057) | | — | | (184) | | (3,362) | | (7,553) | | | Sold / held for sale | 34 | | (99) | | (1,851) | | (415) | | (3,673) | | — | | (6,004) | | | Developments / land | 1,963 | | — | | 119 | | — | | — | | — | | 2,082 | | | Non In-Place NOI(4) | (3,673) | | (4,946) | | (2,711) | | (5,292) | | (954) | | 3,054 | | (14,522) | | | Timing adjustments(5) | 7,416 | | 1,564 | | 212 | | — | | — | | — | | 9,192 | | | Total adjustments | 3,574 | | (36,535) | | (6,760) | | (5,707) | | (10,933) | | (308) | | (56,669) | | | In-Place NOI | 171,429 | | 102,631 | | 104,447 | | 40,433 | | 23,769 | | — | | 442,709 | | | Annualized In-Place NOI | $ | 685,716 | $ | 410,524 | $ | 417,788 | $ | 161,732 | $ | 95,076 | $ | — | $ | 1,770,836 | | Same Store Property Reconciliation | | | | | | | | --- | --- | --- | --- | --- | --- | --- | | | Seniors Housing Operating | Seniors Housing <br>Triple-net | Outpatient Medical | Health System | Long-Term<br>/Post-Acute Care | Total | | Total properties | 781 | 350 | 376 | 205 | 103 | 1,815 | | Recent acquisitions/ development conversions(6) | (160) | (34) | (13) | (2) | — | (209) | | Under development | (33) | (5) | (3) | — | — | (41) | | Under redevelopment(7) | (8) | — | (2) | — | (1) | (11) | | Current held for sale | (2) | (3) | (2) | (4) | (13) | (24) | | Land parcels, loans and sub-leases | (11) | (14) | (6) | — | (7) | (38) | | Transitions(8) | (38) | (13) | — | (9) | (3) | (63) | | Other(9) | (2) | — | — | — | (2) | (4) | | Same store properties | 527 | 281 | 350 | 190 | 77 | 1,425 |
Notes:
(1) Represents Welltower's interests in joint ventures where Welltower is the minority partner.
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner and includes an adjustment to remove NOI related to certain leasehold properties. See page 15 for more information.
(3) Represents Welltower's pro rata share of NOI. See page 15 for more information.
(4) Primarily represents non-cash NOI.
(5) Represents timing adjustments for current quarter acquisitions, construction conversions and segment or operator transitions
(6) Acquisitions and development conversions will enter the same store pool 5 full quarters after acquisition or certificate of occupancy.
(7) Redevelopment properties will enter the same store pool after 5 full quarters of operations post redevelopment completion.
(8) Transitioned properties will enter the same store pool after 5 full quarters of operations with the new operator in place or under the new structure.
(9) Represents properties that are either closed or being closed.
| Supplemental Reporting Measures | | --- || (dollars in thousands at Welltower pro rata ownership) | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Same Store NOI Reconciliation | 3Q20 | | 4Q20 | | 1Q21 | | 2Q21 | | 3Q21 | | Y/o/Y | | | Seniors Housing Operating | | | | | | | | | | | | | | NOI | $ | 175,378 | $ | 163,574 | $ | 172,060 | $ | 143,751 | $ | 167,855 | | | | Non-cash NOI on same store properties | (1,064) | | (399) | | (870) | | 12,289 | | (85) | | | | | NOI attributable to non-same store properties | (9,723) | | (4,842) | | (12,690) | | (6,778) | | (23,506) | | | | | Currency and ownership adjustments(1) | 1,554 | | 1,561 | | (535) | | (1,116) | | (220) | | | | | Normalizing adjustment for government grants(2) | — | | (12,350) | | (32,954) | | (9,327) | | (5,166) | | | | | Normalizing adjustment for casualty related expenses, net(3) | — | | — | | — | | 1,192 | | 1,387 | | | | | Other normalizing adjustments(4) | (1,227) | | (377) | | — | | (886) | | 98 | | | | | SSNOI(5) | 164,918 | | 147,167 | | 125,011 | | 139,125 | | 140,363 | | (14.9) | % | | Seniors Housing Triple-net | | | | | | | | | | | | | | NOI | 92,701 | | 114,760 | | 57,143 | | 130,983 | | 139,166 | | | | | Non-cash NOI on same store properties | 16,800 | | (3,314) | | 42,284 | | (1,524) | | (1,289) | | | | | NOI attributable to non-same store properties | (26,641) | | (28,510) | | (19,065) | | (42,777) | | (54,195) | | | | | Currency and ownership adjustments(1) | 1,597 | | 1,224 | | 288 | | 325 | | 15 | | | | | Other normalizing adjustments(4) | (54) | | (858) | | 3,282 | | (3,282) | | — | | | | | SSNOI | 84,403 | | 83,302 | | 83,932 | | 83,725 | | 83,697 | | (0.8) | % | | Outpatient Medical | | | | | | | | | | | | | | NOI | 118,421 | | 116,448 | | 109,398 | | 114,330 | | 111,207 | | | | | Non-cash NOI on same store properties | (3,590) | | (3,092) | | (2,654) | | (2,665) | | (1,892) | | | | | NOI attributable to non-same store properties | (8,521) | | (7,476) | | (5,673) | | (11,961) | | (8,623) | | | | | Currency and ownership adjustments(1) | (10,052) | | (5,695) | | (1,140) | | (55) | | 296 | | | | | Normalizing adjustment for lease restructure(6) | — | | — | | — | | — | | (705) | | | | | Other normalizing adjustments(4) | 469 | | (664) | | (155) | | (348) | | (309) | | | | | SSNOI | 96,727 | | 99,521 | | 99,776 | | 99,301 | | 99,974 | | 3.4 | % | | Health System | | | | | | | | | | | | | | NOI | 42,425 | | 42,425 | | 42,425 | | 46,500 | | 46,140 | | | | | Non-cash NOI on same store properties | (5,585) | | (5,278) | | (5,278) | | (5,278) | | (4,647) | | | | | NOI attributable to non-same store properties | (1,111) | | (1,096) | | (1,096) | | (5,171) | | (4,781) | | | | | SSNOI | 35,729 | | 36,051 | | 36,051 | | 36,051 | | 36,712 | | 2.8 | % | | Long-Term/Post-Acute Care | | | | | | | | | | | | | | NOI | (42,381) | | 58,347 | | 52,924 | | 39,667 | | 34,702 | | | | | Non-cash NOI on same store properties | 4,945 | | (1,150) | | (326) | | (950) | | (1,137) | | | | | NOI attributable to non-same store properties | 59,861 | | (34,685) | | (30,436) | | (16,445) | | (11,274) | | | | | Currency and ownership adjustments(1) | 86 | | 49 | | — | | (55) | | (10) | | | | | Other normalizing adjustments(4) | — | | — | | 169 | | — | | — | | | | | SSNOI | 22,511 | | 22,561 | | 22,331 | | 22,217 | | 22,281 | | (1.0) | % | | Corporate | | | | | | | | | | | | | | NOI | 1,248 | | 1,432 | | 1,475 | | 498 | | 308 | | | | | NOI attributable to non-same store properties | (1,248) | | (1,432) | | (1,475) | | (498) | | (308) | | | | | SSNOI | — | | — | | — | | — | | — | | | | | Total | | | | | | | | | | | | | | NOI | 387,792 | | 496,986 | | 435,425 | | 475,729 | | 499,378 | | | | | Non-cash NOI on same store properties | 11,506 | | (13,233) | | 33,156 | | 1,872 | | (9,050) | | | | | NOI attributable to non-same store properties | 12,617 | | (78,041) | | (70,435) | | (83,630) | | (102,687) | | | | | Currency and ownership adjustments(1) | (6,815) | | (2,861) | | (1,387) | | (901) | | 81 | | | | | Normalizing adjustments, net | (812) | | (14,249) | | (29,658) | | (12,651) | | (4,695) | | | | | SSNOI | $ | 404,288 | $ | 388,602 | $ | 367,101 | $ | 380,419 | $ | 383,027 | (5.3) | % |
Notes:
(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2684 and to translate UK properties at a GBP/USD rate of 1.38.
(2) Represents normalizing adjustment related to amounts recognized related to the Health and Human Services Provider Relief Fund in the United States and similar programs in the United Kingdom and Canada.
(3) Represents normalizing adjustment related to casualty related expenses net of any insurance reimbursements.
(4) Represents aggregate normalizing adjustments which are individually less than 0.50% of SSNOI growth per property type.
(5) SHO SSNOI includes expenses that are directly attributable to the COVID-19 pandemic net of any reimbursements exclusive of those included in (2) above.
(6) Represents normalizing adjustment related to a lease restructure associated with one Outpatient Medical tenant.
| Supplemental Reporting Measures | | --- || (dollars in thousands, except REVPOR, SS REVPOR and SSNOI/unit) | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | SHO REVPOR Reconciliation | United States | | United Kingdom | | Canada | | Total | | | Consolidated SHO revenues | $ | 637,395 | $ | 101,430 | $ | 100,694 | $ | 839,519 | | Unconsolidated SHO revenues attributable to Welltower(1) | 24,204 | | — | | 21,787 | | 45,991 | | | SHO revenues attributable to noncontrolling interests(2) | (38,669) | | (12,725) | | (22,020) | | (73,414) | | | Pro rata SHO revenues(3) | 622,930 | | 88,705 | | 100,461 | | 812,096 | | | SHO interest and other income | (2,156) | | (1) | | (41) | | (2,198) | | | SHO revenues attributable to sold and held for sale properties | (144) | | — | | (179) | | (323) | | | Currency and ownership adjustments(4) | — | | 94 | | (534) | | (440) | | | SHO local revenues | 620,661 | | 88,798 | | 99,707 | | 809,166 | | | Average occupied units/month | 36,638 | | 2,981 | | 11,154 | | 50,773 | | | REVPOR/month in USD | $ | 5,601 | $ | 9,848 | $ | 2,955 | $ | 5,269 | | REVPOR/month in local currency(4) | | | £ | 7,136 | $ | 3,748 | | | | Reconciliations of SHO SS REVPOR Growth, SSNOI Growth and SSNOI/Unit | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | United Kingdom | | | | | | Canada | | | | | | Total | | | | | | | | | 3Q21 | | | 3Q20 | | | 3Q21 | | | 3Q20 | | | 3Q21 | | | 3Q20 | | 3Q21 | | | | SHO SS REVPOR Growth | | | | | | | | | | | | | | | | | | | | | | | | Consolidated SHO revenues | 556,042 | | $ | 637,395 | | $ | 80,935 | | $ | 101,430 | | $ | 105,088 | | $ | 100,694 | | $ | 742,065 | $ | 839,519 | | | Unconsolidated SHO revenues attributable to WELL(1) | | | 24,204 | | | — | | | — | | | 20,751 | | | 21,787 | | | 42,574 | | 45,991 | | | | SHO revenues attributable to noncontrolling interests(2) | | | (38,669) | | | (7,498) | | | (12,725) | | | (23,264) | | | (22,020) | | | (58,505) | | (73,414) | | | | SHO pro rata revenues(3) | | | 622,930 | | | 73,437 | | | 88,705 | | | 102,575 | | | 100,461 | | | 726,134 | | 812,096 | | | | Non-cash revenues on same store properties | | | (562) | | | — | | | — | | | — | | | — | | | (848) | | (562) | | | | Revenues attributable to non-same store properties | | | (115,170) | | | (12,184) | | | (23,542) | | | (5,285) | | | (3,505) | | | (54,813) | | (142,217) | | | | Currency and ownership adjustments(4) | | | — | | | 3,768 | | | 69 | | | 5,109 | | | (517) | | | 2,266 | | (448) | | | | Other normalizing adjustments(5) | | | — | | | — | | | — | | | — | | | — | | | (1,481) | | — | | | | SHO SS revenues(6) | | | 507,198 | | | 65,021 | | | 65,232 | | | 102,399 | | | 96,439 | | | 671,258 | | 668,869 | | | | Avg. occupied units/month(7) | | | 26,605 | | | 2,316 | | | 2,261 | | | 11,730 | | | 10,850 | | | 40,736 | | 39,716 | | | | SHO SS REVPOR(8) | 6,241 | | $ | 6,303 | | $ | 9,282 | | $ | 9,539 | | $ | 2,886 | | $ | 2,939 | | $ | 5,448 | $ | 5,568 | | | SS REVPOR YOY growth | | % | 1.0 | | % | — | | % | 2.8 | | % | — | | % | 1.8 | | % | — | | 2.2 | | % | | SHO SSNOI Growth | | | | | | | | | | | | | | | | | | | | | | | | Consolidated SHO NOI | 125,856 | | $ | 118,378 | | $ | 19,802 | | $ | 24,603 | | $ | 28,703 | | $ | 29,928 | | $ | 174,361 | $ | 172,909 | | | Unconsolidated SHO NOI attributable to WELL(1) | | | 3,599 | | | — | | | — | | | 7,487 | | | 6,949 | | | 12,323 | | 10,548 | | | | SHO NOI attributable to noncontrolling interests(2) | | | (6,469) | | | (1,361) | | | (2,654) | | | (6,192) | | | (6,479) | | | (11,306) | | (15,602) | | | | SHO pro rata NOI(3) | | | 115,508 | | | 18,441 | | | 21,949 | | | 29,998 | | | 30,398 | | | 175,378 | | 167,855 | | | | Non-cash NOI on same store properties | | | (112) | | | 11 | | | 9 | | | — | | | 18 | | | (1,064) | | (85) | | | | NOI attributable to non-same store properties | | | (16,835) | | | (3,631) | | | (6,107) | | | (57) | | | (564) | | | (9,723) | | (23,506) | | | | Currency and ownership adjustments(4) | | | (80) | | | 907 | | | 20 | | | 1,561 | | | (160) | | | 1,554 | | (220) | | | | Normalizing adjustment for government grants(9) | | | — | | | — | | | (280) | | | — | | | (4,886) | | | — | | (5,166) | | | | Normalizing adjustment for casualty related expenses(10) | | | 1,387 | | | — | | | — | | | — | | | — | | | — | | 1,387 | | | | Other normalizing adjustments(5) | | | 98 | | | — | | | — | | | — | | | — | | | (1,227) | | 98 | | | | SHO pro rata SSNOI(6) | 117,688 | | $ | 99,966 | | $ | 15,728 | | $ | 15,591 | | $ | 31,502 | | $ | 24,806 | | $ | 164,918 | $ | 140,363 | | | SHO SSNOI growth | | | (15.1) | | % | | | | (0.9) | | % | | | | (21.3) | | % | | | (14.9) | | % | | SHO SSNOI/Unit | | | | | | | | | | | | | | | | | | | | | | | | Trailing four quarters' SSNOI(6) | | | $ | 393,010 | | | | | $ | 57,157 | | | | | $ | 101,499 | | | | $ | 551,666 | | | Average units in service(11) | | | 34,867 | | | | | | 3,183 | | | | | | 13,996 | | | | | 52,046 | | | | SSNOI/unit in | | | $ | 11,272 | | | | | $ | 17,957 | | | | | $ | 7,252 | | | | $ | 10,600 | | | SSNOI/unit in local currency(4) | | | | | | | | | £ | 13,012 | | | | | $ | 9,180 | | | | | | |
All values are in US Dollars.
Notes:
(1) Represents Welltower's interests in joint ventures where Welltower is the minority partner.
(2) Represents minority partners' interests in joint ventures where Welltower is the majority partner and includes an adjustment to remove NOI related to certain leasehold properties. See page 16 for more information.
(3) Represents SHO revenues/NOI at Welltower pro rata ownership. See pages 15 & 22 for more information.
(4) Includes where appropriate adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.2684 and to translate UK properties at a GBP/USD rate of 1.38.
(5) Represents aggregate normalizing adjustments which are individually less than .50% of SSNOI growth.
(6) Represents SS SHO revenues/SSNOI at Welltower pro rata ownership. See page 22 for more information.
(7) Represents average occupied units for SS properties related solely to referenced country on a pro rata basis.
(8) Represents pro rata SS average revenues generated per occupied room per month.
(9) Represents normalizing adjustment related to amounts recognized related to the Health and Human Services Provider Relief Fund in the United States and similar programs in the United Kingdom and Canada.
(10) Represents normalizing adjustment related to casualty related expenses net of any insurance reimbursements.
(11) Represents average units in service for SS properties related solely to referenced country on a pro rata basis.
| Forward-Looking Statement and Risk Factors |
|---|
Forward-Looking Statements and Risk Factors
This document contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimate” or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the duration and scope of the COVID-19 pandemic; the impact of the COVID-19 pandemic on occupancy rates and on the operations of Welltower and its operators/tenants; actions governments take in response to the COVID-19 pandemic, including the introduction of public health measures and other regulations affecting Welltower’s properties and the operations of Welltower and its operators/tenants; the effects of health and safety measures adopted by Welltower and its operators/tenants related to the COVID-19 pandemic; increased operational costs as a result of health and safety measures related to COVID-19; the impact of the COVID-19 pandemic on the business and financial condition of operators/tenants and their ability to make payments to Welltower; disruptions to Welltower's property acquisition and disposition activity due to economic uncertainty caused by COVID-19; general economic uncertainty in key markets as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth; the status of capital markets, including availability and cost of capital; uncertainty from the expected discontinuance of LIBOR and the transition to any other interest rate benchmark; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower’s ability to maintain Welltower’s qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower’s reports filed from time to time with the SEC. Finally, Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.
Additional Information
The information in this supplemental information package should be read in conjunction with our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our earnings press release dated November 4, 2021 and other information filed with, or furnished to, the SEC. The Supplemental Reporting Measures and reconciliations of Non-GAAP measures are an integral part of the information presented herein.
You can access our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act at www.welltower.com as soon as reasonably practicable after they are filed with, or furnished to, the SEC. You can also review these SEC filings and other information by accessing the SEC’s website at http://www.sec.gov. We routinely post important information on our website at www.welltower.com in the “Investors” section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading “Investors.” Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the SEC. The information on or connected to our website is not, and shall not be deemed to be, a part of, or incorporated into this supplemental information package.
About Welltower
Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s wellness and overall health care experience. Welltower™, a REIT, owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at www.welltower.com.
