WELL - Earnings call transcript Q1 2020

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Operator

Thank you for standing by, and welcome to the Q1 2020 Welltower Inc. Earnings Conference Call. All lines have been placed on-mute to prevent any background noise. [Operator Instructions] Thank you.

I’d now like to hand the call over to Mr. President Counsel. Vice Senior McQueen, of General Matt Please sir. go ahead,

Matt McQueen

and morning. you, Thank good Andrea

As this Private made deemed statements a certain reminder, during Act. in meaning Reform forward-looking the call of Litigation the Securities statements be may

company's Although detailed Welltower based assumptions, be with its company those filings the differ attained. that the statements in Factors give statements assurances cause results in on materially results no to reasonable SEC. can projected any believes forward-looking the are will are that forward-looking the could from

And I'll his that, hand with to the Tom remarks. call for over Tom.

Tom DeRosa

like Thanks, in of say period. healthy. Matt. Good during us shaping impacted in have been effect directly which morning. I'd your experiencing this have extraordinary safe us I first and that been having and indirectly families impacted of are an way overwhelming to you everything some by all hope and is are many know we I that COVID-XX

property who Historically Seniors to outbreaks. our conditions COVID-XX. have influenza for with implemented or multiple operators by the any flu chronic senior have populate mitigate control of time-tested impact are and affected proven that inflection virus prior protocols vulnerable infection particularly and housing to our

many to operators. personal care that delivered and influenza asymptomatic of vaccines resulted know distancing family measures, our Further given COVID-XX the However, by is we rests level our spread of senior global social with slow residents COVID-XX has solely ability outbreak that or but be residents, the a not to we now combined staff for become drug The an therapies. the society's has learned COVID-XX pandemic. have in spread can care living of with fact lack high challenges members

declines to to not business context which make that will started in March had regular have In performance April. to business, we show this would issued mid-March Tim in the the sustainable. have late provided our effort have began data describe, to start an and see Shankh regarding for but impact updates, that growing occupancy through COVID-XX starting As of maintain transparency in year continued we strong a our

uncertainty the from to that in be this morning's and of the business wellness vulnerable Given residential model more own face to seniors call needs real health manage the settings, focused met taking tremendous are build be enables will to steps on this uncertainty. estate we we

discuss, As acted quickly liquidity bolster Tim we to our position. will

senior post-acute also We office our tenants housing steps and system, care help took numerous health through medical to support period. unprecedented operators, this

needed source started gowns gloves, protective and we equipment example, personal access for for of or testing and many much could distribute March, For tenants in masks, PPE and example, operators to who not our does. to efforts in a have helped needed extraordinary typically protect and staffs times extraordinary not their operators But better These our REIT often is what This residents. kits. these. are measures like and tenants

you our expenses we and increase that senior March decisions tenants and office on impacts XX. – decline our April elective combined withdraw PPE, the in the would to occupancy operating continual use We to surgeries medical guidance data due all cost to told in XXXX a our deferment within business. in rent decision of our Therefore, housing of a from requests operator staffing sharp declines to portfolio, guide contributed regarding

expenses. million approximately After There over G&A what and a manage but lower we past much overall three expenses G&A within compensation by we on an believe million spend program steps control, $XX is reducing is year $XX of to reduce annualized outside can taking this are the to we basis to non-compensation our years, successful control. by our

to it regarding that year. have our our cash for this more would Additionally, pay not of prudent flow believe clarity we the be XXX% dividend, at point, we until

decision data-driven our our shareholders. of XX% also of the decision. a by no interests it But long-term but we pay to decided in this an we've best believe dividend. was is was So easy means pre-COVID This

has and near-term business COVID-XX impacted Virtually overnight, changed meaningfully our our objectives.

estate However, care we being enable remain to committed continuum to across real platform partner and the an more to of health the health constituents for strategy long-term our them goals of effectively important achieve care. value-based

like social basic to to be efficient, vulnerable medication the our senior we This resilient most allow have supportive, on why this strategy long-term and isolation loneliness. groceries, and needed of ways. that experienced concepts ensuring daily to Critical focus is is met care began these populations and housing especially we of delivered to Residential even for the sourcing as place, viability in shelter and business. challenges social like for with the determinants, consistent, are cost-effective health such in determinants in all Since of people populations living much activities believe seniors.

necessary care infrastructure. When rapidly are of a more to a population navigate and the still delivery pandemic is withstand will by we health memory, needs believe volatility can we we environment this steps That COVID-XX aging meet uncertain meet we to mission. said, to the taking health that and bad need the reimagine this and a being presented this wellness so develop sustainable and

that, through with this take over to will turn I Tim who us the financials. will Tim? And McHugh

Tim McHugh

And early balance within on quarter Thank our today into My activity the finally, you, our observed quarter and tenants a Tom. sheet and April. of and COVID-XX XXXX The comments capital impact first focus update. will results.

call, extent accurately business our future the the depend pandemic in in this of removed impact this factors. As a COVID-XX's believe our to all have will month reviewing of at time. on cannot the Welltower trends our will first portfolio reminder implications of of on mid-April, many predict COVID-XX. with full guidance results after components We everyone financial impact year on the We

are more moving both are Although, our peak clarity there or we And diminishes, currently you provide that uncertainty. be uncertainty outlook. hopeful as experiencing pertains we assurance we of impact the as no the is to that able on business to period are peak through we'll broader that economy, it our

diluted quarter. operating property These first is in the share from expenses senior normalize the to quarter, results. $X.XX a share these our results associated FFO the elected Welltower COVID-XX not total with for portfolio, same-store diluted and Moving COVID-related costs included $X.XX approximately or $X to housing level million Welltower reported of pandemic. of of both per normalized per FFO unanticipated

of to components. our individual turning Now portfolio

First, our Seniors X% growth Triple-Net portfolio flat delivered and Housing year-over-year occupancy a were same-store basis. coverages EBITDAR both sequential and on

Triple-Net our reminder, operating quarter a a in As lease stats reported portfolio arrears.

not trailing reflect reflect statistics XX XX/XX/XXXX therefore So impact these any and do ending COVID-XX. in months the

operators as everyday expect Seniors Housing We quarter. experience our headwinds to Triple-Net second similar the during operators

points year-over-year coverage EBITDAR post-acute long-term X.X% growth. declined sequentially. And generated same-store Next, our portfolio three by basis

venture which systems comprised our joint with On ProMedica. of is health to

X.XX first on consistent growth fourth Rent strong historical our the and coverage indicated EBITDAR portfolio last with call, due. points including in quarter's subsequently basis rent have As segments Triple-Net the seniors we across collected sequentially systems in this rents long-term April, the to was total quarter eight was post-acute quarter. housing, health collection times. improved of In and in XX%

office. to Turning medical

outpatient Our delivering X.X% growth. another portfolio quarter same-store had consistent medical

the due. Our we've tenants May for We streams, in are on in our historical of or most the XX% of norms year in rent line deferral XX-day on rents pandemic, facilities-based that with in deferral and was collection with and periods these considerable active a discussions, rent approximately we of payback providing plans slowdown by our in on approved result April procedures. our XXXX. rent significantly collected first April discussions the as deferrals monthly with within elected most in X% revenue and calendar two-month focused Early approved spanning impacted the were we quarter

as of tenants As of see approximately deferrals, today, current we operations financial near received support and brought believe open begin up. we to the XX% term back these in

Lastly, A were first of in the months more year-over-year with our X.X negative than offset the of on expenses year level March Seniors our of same-store in occupancy NOI declined the the Housing property unanticipated approximately same-store occurring expenses operating quarter. million within impact COVID-XX two pool. portfolio and both stronger-than-expected X.X% by

reminder, a metrics. out expenses not COVID-related did As we our of normalize same-store

April decline acceleration total began earnings outright night, in released and as significant in pressures our occupancy month in alongside the experienced the occupancy our that of as presentation XX more update common start across basis in April highlighted driven a by in as became the basis decrease portfolio April. point bans a points at Turning XXX March, an of March, admission in business move-ins portfolio our fell last we versus to primarily

the We occupancy XXX with to continue second these understand quarter basis points to the analysts throughout We better these investors quarter intend expect to help XXth. second decrease declines to our throughout trends. updates occupancy periodic XXX June to continue and by expected

to balance one Before wanted point final make same-store. to on the I turning sheet,

but page Q we the and quarter normalizations consistent As as and I that our morning's XX aligned our practices. supplemental difference supplement with detail alluded disclosures, of shown on being last have is disclosures of same-store disclosure we K our the XX-Q, in only to with historical this

capital to the highlights move balance I through these to on in distinct sections. Now two and sheet want activity.

First overhead balance our corporate leverage; and developments, both lastly to as and sheet, on our then capital investments, CapEx, and liquidity focusing it pertains dividend. spend

further the early capital with LIBOR April million. right commitments billion closed term and this plus upsize at bearing in on obtained two-year Xst by we with be XXX interest Starting loan to In market quarter. the $XXX borrowed We've March a unsecured drawn the loan will on activity. $X for the amount loan of second

of $X.X ATM X.X Welltower's an programs at for settled two via million settlement forwards DRIP DRIP At quarter, a our share to end all of totaling average $XX.XX raise price of the price shares the billion of quarter of forward start since share per the per $XXX gross and agreements During the million approximately this price and weighted million of forward these issued at shares in XXXX equity estimated average prior ATM proceeds. via average sale brings $XX.XX for and $XX.XX. we $XXX million. these proceeds of of The we

$X capacity of debt activities unsecured $X.XX cash of unsecured approximately these under billion just billion billion X, undrawn of term cash our maturities Following and with revolving we no million, our totaling and facility, until $X equivalents XXXX. capacity of $XXX over liquidity and loan have credit under billion as of $X.X May

We the leverage. XX at to to X.XX adjusted Turning debt sequential a EBITDA, quarter net ended point from decrease times year-end. basis

our this bearing impact to believe liquidity allow as the quarters EBITDA COVID-XX, expect in our endure period more we as position due us to to of the coming this entering will of uncertainty. Although, experience well leverage position challenging period we

first $XXX million Moving X.X%. four separate of with investments. capital completed starting a yield blended spend at we across transactions acquisitions In to and the of quarter,

have We XXXX. contract no acquisitions of further for the under remainder material

JV, we anticipate investment front, million of $XXX during million of the disposition a Invesco the another $XX the sales $XXX dispositions unconsolidated and in We of to sales the remainder year an the the which of property final closed On of pro first million. during our related completed $XX million including $XXX tranches two disposition for million of equity including rata quarter. April of

to $XXX development quarter. development, the the spend Moving of we million in completed

development expect the final XXXX of $XXX large for flow million our over the months. the developments as year stages to remainder majority deleveraging the to pipeline. of capital in of development and medium-term construction, and natural pipeline of spend beyond to then we current as complete they next these of our of XX uses spend excellent million cash only of as continue begin The We source $XXX view a produce

capital leasing We period outlook. project activity a larger medical during million initial certainty around on our XXXX. accomplished types of capital tighter our and all portfolio. by to more for work and have the reducing Turning approximately deferred anticipate until $XX be combination on restrictions budget pandemic, CapEx from as projects asset of the some same across our delaying capital will also we existing during This outpatient slows our leasing from spend

the the I over our considerable on on corporate across on first last years, run spent past to acknowledging over behalf done by the months. of our to Now focusing four two managing organization incredible lowering start the We've shareholders. work overhead. business want costs rate time of

when mind been while these tax systems. amongst efficiencies teams we have Our treasury home. have this And were did it working pandemic processes, our has through streamlining the off operational gained tremendous from reporting a although accounting, in others keeping our certainly certainly core has organization this level FP&A, done at we job current initiative functioning and high a paid as designing pursuit in many very not

all million. G&A reduction corporate year overhead lowered million prior expectations is and to $XXX spend. being front, our reductions the management $XXX compensation, expenses On expected new by $XXX to versus of of corporate in full between in we've and million minimization for travel discretionary reduction our hires and guidance a This incentive driven

earnings night's resulting per we dividend night. last levels, a have pre-COVID last in quarterly dividend share release, announced our as to XX% our decided dividend declared $X.XX Lastly in to quarterly reduce of

short impact preserving and times. us the we better reducing of unprecedented uncertainty surrounding second and the near-term as whole, business to of stability most balance a our these we felt dividend the for flow broader the was COVID-XX Given cash long-term in quarter navigate expectations match maximize by our sheet to economy our liquidity as prudent way underlying

We progresses. expect the policy as year to further evaluate dividend our long-term

that, will with I the to And Shankh. over hand call

Shankh Mitra

sharp this Thank health you, everyone. comment delivered with of had a bullish you a with of last for our a formed. our systems leasing capital with gaining we outlook. portfolio changed retooled Tim, environment with And results strength, flip in and I and good on call, our on operating and significant earnings outlook spoke that QX follow-up switch business morning, our In the on were we we will due with relationships allocation. thoughts on When business January March to ahead February, COVID-XX. MOB bullish then our were a portfolio executing and and

through power for no have strong result. the didn't of been question in to COVID-XX our our March, Densely these results, hotspot strong shop markets as we COVID-XX many sharp will That for indicates COVID-XX could same-store consistently also how pass the growth virus. us of that is there notice be you have helped become our But a have delivered quarter. despite you coastal a X.X% to business. markets QX And RevPAR if impact happen. will considerably maintain happen. still you operating populated Unfortunately this year did the earnings that lower in If pricing

some hit sign area Jersey no York, seeing Seattle yet. other just On relative we're But of the with see positive in has stabilization side, getting pandemic the started. on New we where to are hand, starting hard the stabilization New

safety. our labor. In in of Tim we occupancy. have pools expanded topics encouraged highest the resident one safety on us the as three, the as levels is described one, and top three priority Tom, for are and housing we side. that business how far This experiencing we're elevated few operations as actions that are Two, labor the hiring are our discussed by short-term interest though There as employee of Number concerned. swift minds are leasing seniors today. expense And industries and is velocity operators. our taken is PPE

in along We basis total have predict ban. occupancy operators the through drop April will will details exactly in challenging We since provided to It of in decline business Occupancy occupancy you way SHO XXX lift update. take COVID-XX approximately our our breakout the lost March, points XX until portfolio. to that our points of admissions is place. occupancy continue when basis

correlated cetera portfolio's I portfolio have a amongst growth acuity, discussed the with of SHO different of you how location, our and point, our construction diversity price et details in of operators. lack results

and even for and tested business cycles again debt sensitized again have supercycles. these and We models

today However, an economy perfect virus affects pandemic, sheltered once-in-a-century has a in entire which a what population. storm disproportionately we place frail senior a is and of are led faced to our effectively that with

the a of and closing The of communities with has our diversification many remain to result been portfolio. door our compromised. our of across construction. strategy But long-term the And committed we is portfolio benefit that front

why and pandemic financial forget balance available for we real at has let's leverage, the on liquidity, side, terms And we asset portfolio of debt other in the access other flexibility side most of time. the broader of manage should capacity moment than debt wrong maintained asset secured unused not a those we that's black a maturity, swan given once-in-a-century from of is GSEs form debt seniors housing event On particularly meaningful and cannot this meaningful in housing also forms capital estate. to a of CMHC, get context, mix in sheet

As on wide intervention have has the has we somewhat of we pandemic remains wide outcome credit The to we with Federal of both has today, range financial the to we further flexibility again. with narrowed until forceful these here as flow will see curve of still meaningfully outcome started sit the in areas late The range and Reserve's of started and infection clarity. range maintain flatten the outcome March economy. of significant and both a continue

near our discussed, positive wide obviously flow uncertain positive a a Tom retention an with environment the we towards and -- in Tim dilutive As be credit the think have of another is helps range majority point and to closer raises puts distributing coming that at outcomes us avoid playing in out flow this but cash of we not is decision outcome capital-allocation positive observed cash cycle. of event for extremely This in our term, of capital as prudent very it this a us time. step last shareholders will also continuing it out offense turn out

which acted be of completed all In defense equity in-process activities arrange settled now the to acquisition last forward months, many swiftly models; feels to we program offense. defense, short-term lifetime long-term outlook. thought and our Short-term from distinct liquidity two two in loan term mental and like our dispositions away our a pivoted capital-allocation our bolster can

were short All to actions of with in a -- view really period of these defensively a time. respond short done

with rest to assets different year with business it's and with operating all our our executing We tenants select lines working for of across spending partners fine-tune in plan CapEx long-term our where our of are working three operators our the businesses leases appropriate. certain through

by of stream a short-term you significant in this know spend. made number last in our -- We're development the which we of also with means, not projects defense. but development we're this contemplating significant year any done area is work also progress committed of number a completing XXXX, We're of development

is focused We're progress, capital. contemplate to actions. deploy the refinancing of us in by work what starting previous behind might of to Long-term emerge both is set on recapitalization terms stream offense. now design This our portfolio but and and under for opportunities

clearly to have down come what from values Asset don't We know pre-COVID extent yet. just levels.

feet. As transaction eventually call people asset uncertainty world the we after the impact we earnings we is discussed has that large be highlighted that as That purchase pricing. post-COVID for all true is sale That cold that buyer assets last a housing not night, and last The agreement might uncertain in an we on get more well. seniors on our close. did release executed and understand our a near-term was

supply price-sensitive more so to about been and going continue remain of in be always We with our industry forward. prospects tailwind, will of great even have especially light excited the We demographic a balance near-term safety. sound substantially. will of attention which on a after should done incremental decline sheet, capital and be with Any deploy ample a liquidity a maintaining margin we laser-focused price

would saying a to for backdrop like conclude very has COVID-XX by I created us. challenging

we we control the While environment what such pandemic, to cannot we how can respond happens macro as us it. control to around

You shareholders. come. us are long-term business and as as capital-allocation have our there We described so capital shareholders, to continuing the resource-allocation of the and the value decisions more share far make employ to decisions per for managers taken create we to

interest are we stock and for ownership you as of of you. hope by of actions to We the which and and our reflection further portion all of think that a compensation pain collectively shareholders out been come I flow in with prudently is the allocate has a are a in year business our in cash our we our painful ourselves business significant own share stepping alignment to management year you. with shareholders bolster that This G&A, reducing partnership own. the to will the resources

wins opportunity of create the or prediction times every day whoever move unsettling, valued by a subject business for to and value of for of but just -- cash are We earnings around that margin gets real physical create replacement contest the exposure the marked long-term significant Uncertain by not estate and flow over the next value this marked quarter. shareholders popularity cost on to our occupancy long-term. to floor they

the pass With back Tom? I'll to that, mic Tom.

Tom DeRosa

Shankh. Thanks,

together would talented circumstances. I Before such who just I'm to that team the a for harshest individuals to of and with questions, during we open dedicated fortunate line of very work the like coming are say

know having our remotely team entire of in I to that's efforts. remotely. and be used Welltower Yet, has work more of playing their it's not proven are success All commitment appreciative team could you working be company's to not role being the a their and goals easy and a and our critical to long-term together

happy that Board share morning our two most with I'm to to this recognize recently our of you moved leaders. trusted

Mitra Shankh external with and Executive great toward being addition as to has in to shoulder grateful Tim albeit an been and their Vice and through to and leadership Chairman experience, as to day been internal Officer; I'm shoulder Tim in to them period and As Operating a broad McHugh Shank Vice Financial addition intellect Welltower. named named President has navigate uncertainty Chief recognized both for role we his work serving are Officer Investment and virtually of Chief brighter as Officer. Welltower of result dedication a proud extremely every ahead. now Chief days

the a analysts questions, for that to in to of have And your back we you off reporting I'd today. you limit question open because have the may say jump call companies please the just we if they ask that number like please to early another a because question. have of queue of asked that bit -- before we question jump number to one So

So ask questions. that on to and you we'll please adhere that. And stay with your all -- to I answer to

can So, I'll the up open line. turn that, you Andrea, -- with

Operator

again, question, is [Operator question are Instructions] the please there and allowing Once time reenter follow-up we queue. sake, if for one a

Hughes comes line James. of Raymond with Your Jonathan first question from the

Jonathan Hughes

to projecting any maybe May through taking expected are things conflicting to deck and restrictions trends end you But slide or by on commentary in for to Thanks expected and question the what trajectory do rise. worse seems expect expense you're morning. May the Good in at June. these clarify assuming and move-in what Can portfolio and give the look just I you occupancy of the number then is be June, the month SHOW beyond less prepared that statements say, X it compare occupancy remarks. next? the June Hey. seemingly trends that When Thanks. and for match of this you communities like

Tom DeRosa

I'm to you it's for quarter. second going Shankh answer to anything us going predict very Shankh, be But, in Jonathan, to it's don't jump and give that, the why hard your have -- to but beyond thoughts?

Shankh Mitra

Yes.

as coupled Jonathan, And comment XXX that's of that XXX know seen basis So our you with points decline obviously, occupancy expecting the comments should quarter. it, we the are with about pricing. for second -- that to be right next to on

two and seen those obviously, should are be interrelated as together. So,

But, they our majority almost and down others obviously, right the of to speaking, see least now admissions' the April. least shut are, half fact like starting We're completely perspective or is at of in up. open starting at relatively communities, is new down, to billings month it, were are from behaving of shut

their open, I level are to Communities they're optimistic, our taken is But community. will starting where to or in this operators buildings it's us and we're by the ground June. to telling residents that sometimes start are at community a conversations our of sometimes want operators with accept obviously decision in you, new having May, remind

with our hearing, will happen, what telling we we're taken you would not and dividend our with knew decision taking are be the but if guidance. we we that what exactly have So then we

from more. operating significant And But what we're more, said, telling we we know So, you understand there will, partners. know we are as as hearing let our is you we uncertainty. will Tim

Operator

Steve from Sakwa of Evercore of ISI. question the comes line next Your

Steve Sakwa

and way try Hi. XX% income to may the a taxable more the maybe morning. a that's if I'm taxable there further income reset tied could to to of Thanks. about the sort was just specific and maybe portfolio cut. trying how understand trying arrived. figure or just I'm get at in even end you the a SHOW Good the I to out little of whether trend maybe, either to arrived. dividend dividend be, true-up the year how was to thinking how just $X.XX net wanted understand a or to

Tim McHugh

Yes, is here Steve. take I'll This and Tim that.

kind as in from dividend, book you're through following part largely correct of thinking rules. So income, this of taxable REIT the

expectation profitability. book Our mean, follow our that not view -- is that is will view, taxable I largely our income

be between of ends on the side what shouldn't gap there kind taxable a being income So operating for up the you and year. large what performance see

should So into you slightly kind more cut you given cash view the on being our flow's management how a be those gone. of should think -- without getting is within two too much review just different might team where of dividend any period, the on short-term things view

Operator

comes Morgan Your Vikram next of question from Malhotra the of Stanley. line

Vikram Malhotra

Hi. Thanks taking question. for the

need So performance there's out to viewing -- I on you on the of maybe and Triple-Net underlying SHOW potential there the uncertainty side a than us guess tough some restructurings? portfolio? I lot predict How you're it's color the quarter. is portfolio for more relative give the the But can to how SHO recently and

Tim McHugh

my as and we've differences part business how Triple-Net our Triple-Net control of right? we've in larger of of in -- thinking in become Tim -- what CapEx, structure, lot RIDEA is or I a Vikram. financial about a that our time being spent remarks here, talking evolve we in noted different versus we're prepared Yes, And is same properties again. about kind businesses owner various how RIDEA reasons an why ability there properties. to the

same. But goes business same. day-to-day the underlying is largely those businesses facilities that are And the the the in

RIDEA Triple-Net similar that, follow to the much in the facilities, et fundamentals rents in are But buildings. according way within expectation any is conservative RIDEA. think the expect different think think long-term the the of side. And cetera. different fundamentals of kind from of I follow economics Triple-Net to of types Triple-Net to about we most very the very geographies, performance our financials, terms assets the it be different that about is as of impacts we how that going that to to Obviously, the So

to if more we just There's continued that. have see where Seniors collections -- And into there's to this our I to Housing that say point and it how complexity continue we will than think how rent kind think that the through -- EBITDAR flow kind one-for-one probably been of we we they deferral time. any think be to And mentioned And they matters and come underlying think there in RIDEA some about how fundamentals a I'll not and We'll lot that entered even those financials. forecasting we've And on been when we'll that into have May. of in But weakness Triple-Net strong. go how restructures for checks the market programs. extent of rent the update and any as it of period occur duration it some difference occur. be between of to if I

Shankh Mitra

Vikram, a more to of give more I'll -- to two you couple points just some color. that add

First obviously Triple-Net that you different markets coast But SHO primarily not geographic to So about right? one where source will a COVID if obviously think other is, portfolio biggest the of happened of lot obviously coast, our is portfolio. similarly be differentiation. of impact from very our And hit.

and you flow landlord The simplistically a in every is your the second after write differentiation dollar known speaking of as to relatively source check Triple-Net know that. cash you the cost you collect of lease that very right

is both have have of you're every up assumed intrinsically collected that, an the cash and you that That if what the So structure have operator dollar down. is. flow you risk and you above

one did our obviously how act that operator of If between on you pretty what on with how you is an think a Welltower you effect as then on happened we we how that in what cetera, situations you're we'll thought we you Triple-Net act way. this as spending for the good operator? will is a spending depend your of the depending some event time we'll the unfortunate but view one and of market just and -- of these think Now lease duration et and the

think and for is you good our be think. it's business to been operator will should the That's to that operator or we you a eye hard -- good is not If never all us not then forward, on yours how downside you are how upside don't not the tell have go shareholders. a it see eye we and

case. on is by it be a more that And nuanced based to will so, much going answer case be

Operator

Michael with of Bilerman Citi. line Your next question comes from the

Michael Bilerman

if business or event. you even a care happened of and with I hasn't acuity about Shankh know experience or I type do and verticals health going for Does mindset XXX-year think you you Tom run level the has higher it net of XXXX was don't what the mentioned But your as it more the don't your portfolio of though century guess it as occurred total health as that's your side Spanish assets of diversification perspective -- skilled need you type? a the on this change IL assets. both especially number senior diversified SHO to housing across portfolio you since terms as the percentage that by of than in especially well within lease your of whether the your have more diversification equal much through you'd to care less how want Flu. does how pursue care have want broadly different health weighted And based that

Tom DeRosa

question, That's Michael. a good

the needs of those models we manage more aging because whether less of seniors acute. believe acute population still that can or Let the together that a seniors off. in Look going me of the that living because are to bring population they of to committed better still are needs are and longer, be who their start we settings

in model, we in me think longer-term met sitting lot. and there's that than think at alternatives don't a you efficiently. seniors better about while effectively this we is cost be challenging So are time social that a where a talk Their can determinant -- we hear we moment putting environments that needs --

At all better health health would in initiatives, prior the to we're we of of last many into with have progress about Remember system our will allocators a say provide their different are the where would that sectors opportunistic that across number you started future to deliver of making more seniors. same thinking care. which aligned the settings months two-plus what systems our that to us portfolio. and bring services nation's saw in capital us settings health very time, we're I can look diversification they they hospital. the And where services the differently about them are of outside with

much we anything want that? very to to has of future the Shankh, care. impact you the business, it to think we're biggest committed add So senior do health still on the because

Shankh Mitra

couple a Yeah. granular more points. of Michael

except I First is based I primarily Welltower's the U.S. – mean, portfolio portfolio. a need say portfolio is when our

portfolio. is primarily Our need based a U.K. U.S. and portfolio

in partners need-based the U.K. couple are also U.S., operator our U.S. U.S. think markets our independent a we business. U.K. have with a that business. and operating provider of who right are business business good primarily We generally living right – very which in the can speaking be But

is think housing business. think very business primarily exposure and is continue to business you're different is do that talking Our Canadian And independent a that a business that we alternative about well. that business. will We living a

that we're that aside opportunity that that Price as I where of me to you senior real equal than a we I is long-term being If see know a price price the aside value everything ask is know other and you no biggest of asset think buyer create a all housing. things we at first thing class there today price. has better think is estate about opportunity

me $X that invest housing. So the will are asset invest going price I what given be all senior that told if I you I fundamentally health investors care return total be would classes aside have where where on returns think to to

we'd take not exposure like anything if So our down. it up to

Now, again aside price that's the comment.

Operator

from of Your SMBC. Rich the next comes question with line Anderson

Rich Anderson

at will a class back you the tough morning picture. and would My senior that longer for asset perhaps in might comments how the some business of that big the this. there particularly if possibility will to are go be there's how be good the a back and through it some going be sort within know of that frictional be to classes? fundamental prove too walls to of asset to open very be an the Hey, changes. we and this and term. change here these end if of any skilled reasonable the It's will soon hard itself thought just housing all not color at is change manifest about and But some fundamental wonder, end businesses I term. to to is would form incremental these nursing to thanks four giving know. in of commentary, perhaps stay distancing times question as operate you there into be all imagine And vacancy no fundamental or of this Shankh more social all in least your longer we better observation where may

Tom DeRosa

to will mitigate with in technologies think particularly with a the fair Somewhat, that question the it's technology pandemic. that a dealing hard companies. in infection there Well, us and or risks think the now be model changes buildings been fundamental That's an create there based buildings. I positioning? we the to mean due some will essentially senior Rich. Yeah. I we've make right seeing for service in there's living more I that on headed what predictions Look asset be today efficiencies and will we're And going enter tremendous to of viral that new were outbreak

very true I'm we're think every get feet a health the been by many about is very to say infrastructure is that's but of what not if in going aging also which health the this been other care believe to that's issues have to hopeful period leaders of early hopeful the evolving back of come types I the the stand of going a going a that's we that setting differently thinking in are this and they have health pandemic. six their is that still meet will demographic the we've I it's models of each one a mean to already And we system manage future. will if a world I'm apart be And to we to that business live population. compromised distancing challenged know biggest if I where and the – seen be social way delivery care that through future. – systems is think constituencies. to have from I which

feet it's each have I'm a anything have hopeful other to So, in say. add. very early stand we we Rich six to world where don't Shankh from long term. you to live apart

Shankh Mitra

dependent you is change you always read this read coming are change. of the yesterday. COVID where If Majority are. we we're Tom. you anything possibilities what coming least us published or and Rich, at we the open -- share was if you we and with that can business is believe together if we they this always things always think saw Governor saying sometimes think are happening. that Yes customers if that we about do the receive receive you we're I Cuomo's what hospitals presentation about will we data homes. the not with our is operators our your question for York and pent-up But New sure to letters data receive that's if not in about people demand If to from I'm tell

right. New of X% Only people from the to hospitals doing assisted coming our living. that industry who coming you something actually are are is York tells That

keep right? we everywhere. is Pandemic our said work pandemic, all we it frontline why that obviously people our doing too. our is prove way when Tom guarantee. That's new be change. Now we the -- done of a if change other an it's we're amazing all and as and things operators always in no to are to believe open called all But are will residents the safe. seeing and might But possibilities. that's -- COVID always memory out open when to when facts distant to But There's

Operator

line question Wells with next the comes Todd Your from Stender of Fargo.

Todd Stender

well… I hope Thanks, guys. Hi. everyone is

Shankh Mitra

Todd Thanks,

Todd Stender

you're in Seattle. Thank stabilization. improvement seeing Shankh you. In or Seattle,

characterized seeing Just from York, New area. signs expense are away how get New you Jersey far of a any improvement you the However occupancy? Is it it close Is prospects control? trying or it. of to in sense of move-ins,

Shankh Mitra

was -- in when beginning a we Seattle week. of at fell obviously, in going Occupancy started Seattle Todd XX down So points basis the off beginning giving of basis updates. this these cliff this the XXX the all points, you,

seeing is something week more Now points basis like points, going we XX a that. down occupancy like are basis XX

going So down. the significantly. derivative second still it But is improved obviously,

obviously, states -- are the other our the operators is here. when But panic I New coming sort occupancy. consumer, peak the And the pointing open And It hand not not was seen still but on in all I But of two you curve feel. obviously, the sort it's All yet. psyche a to only and of flattened out on purely see it's function drive, impact trying how happens, of infection of, York, that has pretty it's was we'll safe have also the down. distinction.

I'll give example. you an

our L.A. of market One today is worst-performing

of call in most Southern probably it's years- out of not you the is of, which eye impacted, L.A. been performing L.A. sort best sort you -- is is the think years- impacted markets. but you don't that's It why what California the today meaningfully think storm. has as as about of one not And market. our COVID-impacted

The Southern operators have buildings in everywhere particularly. reason our California in all L.A. being banned admissions of

a hard open enough when function is of So And that you back. to our see will for will it happens is to happen. will buildings when that when operators safe feel come occupancy It new the say residents.

we XX occupancies will whatever Four going our significantly, in so basis it's I I across call you all weeks happening mean for to the we board. give think about. down right? some more operators color when were down it seeing business you were said our ago, points coming let's update,

Whoever buildings first – And out was impact. moves. the obviously down. see shut moves are You

we're operators more difference approach some nuanced flattened seeing performance. seeing We're of have our and out literally of flat. Now

they as May are occupancy X. of particularly of have We gain our the seeing of operators a some couple communities as to starting open to started are

given psychographics is location they to on So that's the that performance location when to get completely and are is uncorrelated say early and to supply we based happen. a demographic, nuanced back by too norm. of it location more manifest starting But will

Operator

of line Capital Markets. the Carroll from comes question with next Your Michael RBC

Michael Carroll

kind actually prepared going clarity should on? you opportunities? you is result Or this. opportunities might Welltower to how some I opportunistic as deals? of mean find thanks. your some bit be wait there the what's investment that be that to stabilizes you Do types in remarks going we Shankh distressed have pursue commented market want Yeah, a to the actually some until of of more those expect you of until

Shankh Mitra

Mike. that for Thank question, you

That we of mean what businesses. have So often real true for line is mean generally to you you estate. know have we clarity, that of what have the clarity NOI. probably for a right? doesn't a the we be It of happen with clarity, When price will majority goalpost comes true when to the

know what building to a You given location. in build it costs a

that is the months. that's opportunity what in have three of be next can margin price you you safety know bake don't what you case if price per specific the to door, foot a per can and NOI of then So enough the will have

never We buildings way. bought have that

– it can is specific take what But the margin so in of has will We obviously our view accordingly. we to should be that have of with our and our one operators building act us long-term priced of to occupancy and specific with pricing a and value. near-term that we be operators create uncertainty

Operator

of question comes line the Deutsche Derek with Your Bank. from Johnston next

Derek Johnston

Tom you. Thank hospitals. mentioned you everyone. morning, Good

critical has feel still them infrastructure. future investments this deem federal overall too hospitals. we health secondly change to of the Act your Does within the do hospital on system? we many? And And at backstop all the So CARES the essentially have view provided

Tom DeRosa

and the I think consolidation. to too hospitals I you're think going U.S. see there many continue in to are still

it's I think very that interesting.

many of you've surgeries got have hospitals them off because If are had who as they've not COVID at XX% elective and you cases. the Derek operating look capacity fallen at cliff many the

strategies future I the from outpatient this don't we challenging systems. to away health hard the based movement a time the by ultimately it's right see – of a pandemic. predict have very in where the think But we for So systems very broader I it's you're – now going health hospital. – again And middle I sit to on

from we're people surgeries. are systems do government people the on are the line what they them beds the in obviously, and And systems that's COVID through the their many conversations. with with least responded with our COVID-XX this. health and not have our pandemic elective are At of has hotspots Because the seeing supporting by health filled front filled

it's I environment many Derek today. – being the pushed predictions of our on very And again too based health a lot real are But those off. for COVID-XX. systems It's make created a a challenging wouldn't again

a But and a extent to damage be it's think reimagined. to infrastructure. it's of care to going rethought think to I lot badly going I large health have

outside So the say make predictions would four that services to still health walls any again looking acute the basically we care of conversations deliver hard but are of to our I hospital. systems traditional we think their from

Operator

comes with next the line KeyBanc. Sadler Your question from of Jordan

Jordan Sadler

Thanks.

just portfolio? you that's and in at in early. sort touch you know Just could. on driving maybe of the to us portfolio? happening. forecast be what did the the bit seeing? sort too point tell of best the Seattle to you're green in of maybe what's I what occupancy wanted highlight shoots Just else optimism I SHO But story it's sort for little think anywhere a I seems way to least way, but And if can of June May

Shankh Mitra

Yes to dividend, things exactly John what If I have we not reducing done are know to you out. comment we this that. have so, would play going have going you – to know the right? again. said hope to going we is what is – acknowledge happen I this. many I to how we times know going done by early knew to I'm what have I'm say it It too

not you, are two tell there stories. board, One that, this I a I comment. Welltower can said types Having seeing, we're is mentioned, of just the across

means our residents these safe how daily these they letters we our of all to thanking and all with them are how of goes their this it frontline all this I pandemic care our residents And they're on taken are partners much the is very sharing how kind of were seeing operating acknowledge working good have living provide from families operators to keep that on. letters when hard to assistance are and hard. where us very, that in that coming feel think you people the are

tells there's the true the product. That a product us for need

a our told up the New is I right? she couple ago of the market basis the that There much moment me pent in Jersey, of operators May opened up up as moment, operators the day demand. if of that a points. days a – that CEO by one conversation X, one handful operators, our went our told of you occupancy on we opened points, opens Now, on of that one basis that and buildings New the buildings occupancy with I York had go XX building can today, best up XXX

that moment basis I'm occupancy by that not true not for these happen. up to all XXX points. I'm will trying trying go you you communities to building. it's tell to open tell going The is every

out. You If are say we out not what be did. will asked for it a exactly a positive early positive knew story. I gave doing will will how how you we we It play story of hearing. is things we to what just too play

Operator

question comes Scotiabank. of from of Yulico the line Nick next Your

Nick Yulico

Thanks. for normalizing adjustments had the question guys a I you have about just some FFO. of

related provision broader talk just are to what should And that your then estate that you. in going that was understand had non-real So year? you're the receivable Can you conjunction you about loan income corporate book? losses loan that -- Trying actually a you straight-line receiving what's what's an lease. to. I about with operators? to loans. on write-off rent loan it your those to us amended from related just think And loans booked, with think how the Thank cash And this remind book we is for

Tim McHugh

Yeah. Thanks. I’ll take…

Tom DeRosa

Tim. ahead, Go

Tim McHugh

Yes.

Okay.

normalizing. the On

with agreement We're third one landlord. a on they the I So this came announced we earlier prior -- come those other of landlords of of couple had Capital top quarter think landlords. to when with that Senior

will with into as that through the runs So, restructured them we of essentially transitioned. properties lease part then our year-end, be and

the write-off is straight-line there the from just that So remainder due of the to lease.

book we've loan. riskier shrink reason. loan They're not just real the was loans. view it's partially was backed a loan actual over bit your non-real is loan, but estate a write-off correct -- the loans for Capital that restructure. -- provision obviously a the corporate Part working than the then loan meaningfully collectibility. time loan continued change under backed we've it's it's this estate to you're capital of our on that So impaired for the Senior in it's of And loss And a

in the And any of versus give cash page versus interest interest GAAP cash out pick rates on non-cash NAV we supplement -- we break receiving. kind we're on or our

the should standpoint. from give idea pretty rate a run and a good you So cash that GAAP of of kind on both a

Operator

Street Hartwich Your from question Lukas Advisors. next Green comes the of of line

Lukas Hartwich

Thanks.

the about lease-up For unstabilized, curious recently thinking pipeline the how there. in and the the just but SHOP projects. development I'm completed change you're trajectory of

Shankh Mitra

we definitely, locations. are what than I do obviously, COVID be We happen. very walk be didn't Lukas properties the lease-up very will can slower strong in they would otherwise think through deposits a and if have, strong revenue et the become fact is many into obviously property-by-property that the to But obviously of get tell people building cetera. you need stream. matter how to for

will And in that's there's question thought velocity, before we times slower. obviously leasing Post-COVID is back to the uncertain happening. no this will they lease-up that what not get COVID but this obviously be --

of So take. it thought back number everything whatever that will move can you of you months sort

exist it's to You'll COVID some be the to added out. Maybe move just the to that and pent-up will I results. probably will of think safe there it's but similar to we will assume pushed demand, number will get that think have that you months

Operator

the from line Okusanya question Mizuho. of comes of Your Tayo next

Tayo Okusanya

everyone. Good Yes. morning

Tom DeRosa

Hi, Tayo.

Tayo Okusanya

to allocation can maybe how it position that Is bit kind you understand about do attractive kind talk start curious better right to just it time increasing think your that that? how to that I'm it things Is is liquidity a little but of My dividend? would Is share of do is Again to fully as liquidity reestablish? question kind you whenever as of back become just about you look think today just preserve as the deploying bit Is point? you capital the decisions? acquisitions? buyback more a had when when at the goal possible, it of is the about kind with allocation. little prioritize capital much

Shankh Mitra

is we really, how a embedded on on matter price of getting questions remarks, one I about thinking good the my buy and out important we are we offense. really it. focused on that's IRR into most Tayo, today. that prepared question Everything obviously Yes, a laid are of

asking about answer on we a know if sit here I you we're you more helpful liquidity, but investment is is the nothing As how today. I'll you are to think give attractive -- -- opportunities might side for so as we tomorrow that might tomorrow, different because And And than that that everybody the is we about comprehensive stock. might more that there sit we that's see were through. here today see change on probably obviously thinking very buyback,

in my opportunity opportunities mentioned fractional we're a allocating thinking to as I stock company. is as a and to business. we know about new well applies It's the capital on a best. As believe script, we offense. our is in That how not new a I ownership ticker. getting That the own you described

per do one, discussed, price real should a company a only below, We of sensitive. good number estimate what for price that we It with And basis. price which we per cost, estate fairly pretty be done like on and worth. replacement be the when should us, buyback can think business foot as think door, simple is we intrinsically should be

sheet should be sensitive, keeping advantage three, after growth should And and need balance it done number be Two, be to met. the continuing it shareholders. intelligent should of our prospects sound are

you that back did stock to market of of doing not cycle. it was So lots we buy know at so. the And are S&P as it when fashionable XXX do top the companies

contemplating dollars back to buying get earnings In company. that our not paid. We're can fact, to of financially engineer billions stock we we so of our grow sold stock

the you reduction significant Just to described compensation management opposite, today. just we

buyback But uncertain that all of business from form this is stock. the up the At of we form forms as capital more current method, than other return believe and distributing buy of leverage back world, state cash, dividend. not liquidity in the at of own liquidity that we source to take assets. said, to need balance from sheet this our Hence, we'll we point, intelligent

this other is If transaction or this believe of that deploy then should capital you stock for management team that think acquisition capable we buyback during that do opportunities. pandemic, executing such we'll

is cash and don't think that you from liquidity the deploy buyback can't that we or If uncertain else then not not. you somewhere the should too get we'll you market think and

Operator

Our of next of question Valiquette comes Steven from the line Barclays.

Steven Valiquette

Great and are safe. good Tim thanks Tom and hope morning, Shankh. I

slide And overall regardless Triple-Net curious, more little care the to page deck, memory the financial XXXX. that's what's definitely regarding assets operationally Regarding in helpful. in XQ just on the particular in systems beyond XX, health updates the of portfolio if of just the a health you're able happening provide color on ProMedica

that any And they showed and second ratio hopefully these EBITDAR of you opportunities, might low in have the Thanks. payments, there whether when that in hospital quarter? operational is acute April that coverage their you the federal stimulus they're thinking softness majority May about seeing from in offsetting, are the ProMedica be twos care color the receiving

Shankh Mitra

of into So, is extremely get It details that the take to Steve. financials. inappropriate us I'll ProMedica for

Given a lot that company have ProMedica I is outstanding. obviously with bonds a fine will in you of a that tell shape. it's

obviously, assessment the elective Your know, that is direction be surgeries generally all right you there as stopped. will in the

Obviously, of the got side impacted. housing senior the the and business side the business of post-acute

-- On is a have very in which insurance a a the hand, obviously completely they business different in completely other direction. working performing large

ProMedica whether operating your what not for us receiving that. the that to details directionally or But should appropriate from Regardless, assessment right. weakness more is be is than general offset not Act should it any any get CARES by be into system

of and lag. on All are primarily said. quarter XXst. coverage Our reported coverage actual a operating the is coverage our of buildings not performance of that it's as happened this include And December any obviously does one as Tim because the in what

Steven Valiquette

but or the guessing things that. might high? memory do on I'm low maybe business list want overall low simpler care now question just on, is of maybe right overall be to you where it's box just ProMedica and the now about Well, the I check then in rank right worried that the

Shankh Mitra

low. line on worried We're that about But everything. it's very, very

Operator

BMO. Your next from Kim question John comes of of line the

John Kim

or outside senior morning. any if Triple-Net rent have you of for commentary guess your housing Good them are a to similar a support you not, it's could And contemplating any Thanks. cut? financial I financial of on, the any assistance. whether partners, health receive it's on SHOP question ability government whether

Shankh Mitra

structure, obviously have. We not I'll think, not liability. That's partners our an take our ideal a John. do that. financial operating

you look at, asked if So I'm this you this question. -- glad

meaningfully If of in balance position. sheet the look operators the better versus you large cycle this a the it's at last

So Triple-Net. the which I we're question is a of discussion of the operator how where of to observation, with second already the on in another obviously is about there that's you leverage had a colleague form response one lease sort general asked thinking an

I'm not at other get speaking So, this going moment, that. generally But anything are we else. than to contemplating into not right that,

Operator

the from of of Johnston your Bank. Deutsche question comes And line Derek final

Derek Johnston

has It again COVID-XX for peers, end. senior in another resources. so let's favorably that seems Thanks Hi, housing everyone. versus fared with one less say, far Welltower letting me other in containment

So capture marketing how core are and offense? you bans your or once maybe outsized on outside or even end admission planning demand to competencies SHOW basically on pent-up really go

Tom DeRosa

So hands Derek, it's at operators. the very of much the

I show operators. -- to very do data business. We individual that are think their as have That's not we helpful. promote they don't good will be

together, think here gathering is promote which industry the industry. is that throughout to important good is happening what think I senior I living piece an the

facilities. A that of tragic attention said have Shankh nursing there media on in -- will been I some largely undercapitalized on But this. situations think occurred that focused negativity, lot the has

there be to people impossible good this sure help can marketing of And they the stories to think population aggressively will be they I stories how be during confidence their in manage tell about the those will you that needs situation. regain sector.

Shankh Mitra

add just Derek. I'll And

outcomes crisis You're asking coming Strong operators there stronger. types of will or opportunities be access that health to an will operators. more out We -- extremely question. get will operators believe get have technology do Strong stronger of stronger. or with good other will this

with it slip estate gain here operating been and of business the in see of time-tested the there And you have will I time in will players XXXX, lot XXXX because real has share. the got who that think been marginal a models XXXX, operators So of very frame. into market call profitable was sort they

Operator

no I for like over questions. are it remarks. there further to management any And closing hand to would

Tom DeRosa

any take you always directly. participating Thank our in for and call happy questions additional we're to today,

to reach the team, please So Thank questions. have if you other out you.

Operator

participation. call. you today's This your concludes for Thank

may disconnect. now You

Welltower (WELL) 7 May 202020 Q1 Earnings call transcript