WELL - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Q4 2021 Welltower Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator to I today conference would Instructions] hand to now speaker [Operator first like the your over Mr. to McQueen, Matt Counsel. General go Please ahead.

Matt McQueen

morning. good and you Thank

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

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

Shankh Mitra

Tim highlights, a conviction triple-net year-end and I'll update partner will in high-level by our morning high talent walk everyone. through capital through quarter show Matt capital reflect business review MOB housing senior trends, our you, a and inflection marked back was operational priorities. the and acquisition, first portfolios good and an walk on XXXX and provide call, and John will and year our you you quarter, Thank sheet powerful deployment, for this balance environment allocation on business. businesses, the guidance. on XXXX

season. year demand continued proved for significant last seasonally housing the through Our witnessed belief in the the long-term as which winter out in weak of thesis spring we the senior occupancy starting historically growth

of employees significant from it to can improvement you through given experience a up search of am not labor inquiries with we just significantly that our walk a revenue you I behold pricing low to that second with After half even during encouraging the in growth found in of with QX year what power Same-store continued to same-store of first in of occupancy revenue one the able XXXX, will these falling X.X% low in RevPAR of the in grew Just shift in pricing QX Delta XX% we the relatively despite strengthen US power the the and more offset QX our moment. at standpoint, believe fourth accelerating years quarter. of issue. we're is due in achieve Omicron. in class or the see that is the of history. I Low the year-over-year asset contract full-time all higher period is have assumes strongest the as as X% par year momentum range. Omicron variant. increased From crisis, the the is significant our to labor COVID, in January soft prior net December. a the bottom-line record in continued during interest partners. details the product level pricing we with saw through the that done hiring from continued mainly we expenses We continue occupancy impact quarter Interestingly, through And significant Though throughout a infectious of levels. a to from the levels trends This this don't do industry in results induced see cost exceeded began will quarter happy operating power. know source importantly, of power we we X.X% to pricing and demand a pricing presence highly seeing company's John growth a

conduct However, as was the a their or prospective as or either a canceled COVID tour COVID crisis not family have enough resident or employees the number postponed in to there of that got did got a meaningful the community tours communities.

see about should three we strong in higher have weeks. right to we are sales activity, starting the meaningfully which picked next If recent four net in are and However, up into tours translate to weeks this, move-ins in further strong NOI occurring the you to environment the accelerate rate this may only range put We growth see project growth. double-digit QX of an occupancy throughout will into in seasonal while year. growth trends, us exceed

disappointed year, and in in to continue due the unchanged. run costs as believe only million QX of of to $X earnings agency I million bottom diminished QX, platform of compared our exit I $XX As line am flow-through that XXXX power about last to is XXXX rate this

this believers we capital Moving and result better to in even across XXXX, size accruing the incredible a at transaction with aspect great the real in value larger The billion nature hunting, as a seller. fantastic median granular of elephant allocation. of usually million. transactions execution We're In of deployed operator not most story $X.X was price. with estate, $XX to

you we no was increase to trend. company consistent QX our share our for this exception value. manage know, As long-term this to shareholders

and excellence. We of, of of proud execution couple have won't I'm of most Quality the of XX basis. which or handful billion QSL. of conceptualization strong and capital deployed have Living, size a them, in I how to very buildings separate Glynn hard trophy exciting you perhaps to Senior I of transaction, a But built the formation transactions particularly details the the every across including a Andy of from to operational and median at was million. their attractive with overstate and development not our at of quarter of would in be with $X.X a remiss mention product, team, QX a investment Boston bore Glynn $XX the partnership Florida but ultimately It with Andy is

platform of users multi-year brand I've as with embarking is people growth with For were come. analytics will full so partnership seeing are the business, a platform expand virtually that the attracts effort across execution multi-year you our data years the example, the is Andy I behind how highlighted, labor platform Blake of the are for formed and fuel our and more used support challenges agency analytics This over our few despite on our offer some QSL have to no to hope capital. last labor a effect of network all of of who that him. years buildings their predictive platform best biggest occupied. than pattern in the we here one well much data the

highly after Delta Omicron that we the only in quarter a report $XXX is challenges, the ugly And already and continued a weakest and strong set I'm pipeline over activity. approximately close expanded six QX, With capital head seasonally XXXX, As that the pleased deal that remains and which we from had closed opportunity have investment weeks. actionable. an deployment in of induce million -- to of robust, visible our last QX,

But of We're record before. if we're to fund $X our both remain and over will driven positioned from capital deployment track markets billion we our different allocation continues, late backdrops excess of market volatility of our Fed with toolbox, of well have primarily tools of in pipeline proud capital the While volatile sourcing. access headlines, billion. as and $X done availability capital by equity the well we liquidity

alternative triple prime infrastructure ourselves is UK growth exceptional pandemic vehicles also Lastly, thesis. largest our largest Switch. Avery, Brothers trajectory infrastructure pioneer mean expanding of growth the family many disruption this investing of unparalleled from the We're are massive analytics with real Partnering different been the the very particularly constitutes execution operations, through the NOI be in Wall devastating is of necessarily of society buying execute and partner. we XX have The call platform Tim coverage. which built UK. with find estate I'm Rubin globally. delevered both infusion investors some Rubin for across with degradation our wellness or new significantly partners cyclical and as for same-store platform the this data said value, has cash estate of investment real of this global both in I extraction of equity is about of despite Global have Brothers. secular so founded growth share prospect on net as operating of an allocation will owner and together the and entire Street's owns and business stage earnings real to cycles conclusion, the and Rubin -- estate early Avery we with our optimism multiyear prime a and care doesn't but partnership. David like for advanced Brothers, ecosystem, infrastructure highly offices one very land investor by value Rubin Brothers the it. is high bottom our and and for Brothers this Rubin XX% There world with health sophisticated of of to flow proud our announce The view capital Brothers temporary of proud in on talent of conviction ages. XXXX set during one times I'm obsession as as of our and Reuben Rubin Healthcare, partnership excited owner most with in at long-term which point-to-time to the Simon the In validates in down and our given and doubled that our

John. be shareholders pass our over and assured continue that, on that as that wider You our I'll can With to rest resting John? and will not to it moat. we'll deeper laurels dig

John Burkart

quarter, NOI medical Thank X.X% office our the XX a despite fourth our the in you, operating of basis growth Shankh. decline portfolio. Starting medical prior management the performance comments the In with outpatient in on today occupancy. year's our My focus over delivered segments quarter. will point same-store quarter, segment

rates the reasonable with market related value push will portfolio. We renewal costs of continue rates the the at to and maximize XX% level accept as of in continue increased and we quarter the see increasing and rates, turnover vacancy fourth exchange and we construction strong frictional retention rising to in

Now the year-over-year during prior these the gain increased for the in approximately any portfolio business year-over-year pricing year-over-year occupancy points revenue in housing full senior the period revenue The strong over representing our year's since power. occupancy quarter Occupancy X.X% basis beginning portfolio pandemic. Compounding the same-store fourth the XX.X%. pandemic quarter portfolio. beginning in increased the to first of is the since in largest the quarter. notable the housing increase basis strong since strengthen. first turning and of show shift grew of spot to Sequentially, demand-based occupancy XXXX. a fourth senior recovery points operating the continues XX of XX quarter The show growth the trends XXXX, same-store to Again,

have metrics in RevPAR little markets to community able Over operators our outsized charge year-over-year through were of the the increase are the reflected course Canada, able fees, the an year, on January line are in the showing and increases second charge of February successfully RevPAR US to And are which both in and expect rates during raised X.X% community following, of UK, and quarter. we raised Geographically, a of half to the renewals no again again further the each quarter. year. pushback same-store over growth with acceleration improvement the top and in

X% portfolio, Canadian posted which revenue of has Our year-over-year recovery, lagged in XXXX. QX a the decline

in accelerating year-over-year basis, respective during fourth growth to moving the the compared revenue UK, a months. to the same-store of grew months. quarter a X.X% October of the increased Sequentially, the decline of our prior X.X% year's a October revenue revenue intra-quarter compared a However, prior December to of from same-store X.X% rate X.X% in improved quarter. decline to year's from Canadian respective X% XXXX, fourth the XXXX, in of in X.X% XXXX In December the XXXX, decline on at in portfolio

versus was growth US, the year's to in X.X% XXXX, versus of is the year's by combination in agency growth top encouraging revenue largely accelerating the in The year-over-year October in acceleration line costs excessive X.X from pronounced X.X%. off quarter. majority Omicron in expenses X.X% in in particularly time led month increased The and X.X% of prior quarter, agency US, these Finally, trends, quarter the an our expense times increase where the Despite disruption almost revenue cost. in prior year-over-year fourth December. portfolio to was holiday the agency located, driven the

the opportunities employees value base substantially issues opportunities receive in COVID workers. Excluding proposition experience rate the have Agency The is premiums short their site, to to care the agencies do the said, temporary provide improve care away they some employees, That and as will the extreme site charge daily than six a use much employee. period hard-working to is and to has agency crush, our the connection system Stress agencies X.X%. travel costs, pass on times, option holiday life as brought city excessive care the customers stress for of in from to health state health increased basis, lack by the both a and typically and the and agency operators Systems on been highlights they nature, who desirable of truly expenses a they for that term less a identified exceptional through desire benefits and which to and The recent the work short-term quality families. health do that state during city, that permanent their either. from of coworkers, their as not and not often workers.

Additionally, nor the processes operator they systems not agency specific do know the requirement. employees are less site, as customer the of or efficient, the nor the

growth recent first we QX but Our workflows permanent XXXX. of an with improve agency the the Omicron fruit to NOI Agency NOI expenses quarter and expense staff marked employees, outsized bearing confident significant delivering of operators ability in of time Through strengthen the XXXX, second XX% NOI results remain prior continues operators decline moderate and were January, expected XXXX value has of same-store is for further disruption through X.X% the XXXX. from underway the these declined expense in for substantially to the in in period. of to despite have have improvement Omicron. labor growth of XXXX, was positive fallen. to many at half this fourth still declined to our The which as cases proposition over the Nonetheless, drive labor recovery half in a

by caused Sean described. of a disruption tourists, other was The which cancellation record Omicron

and drop seeing their However, normalize. basis we to operations points the occupancy down tours and at from disruption XX% The weekly an point, of are fall are including US staff sales caused in January. this about cases XX% XX peak in

will quarter. we will traffic, lost and However gains expect high return the with the level we of of the that regain by that the occupancy occupancy continued end

in operators four-week averages up and fourth week-over-week weeks seeing strength continued some were for quarter of XX% last inquiries the XX%, “Digital and “our tours August January”. inquiries the Here quotes been in are traffic XXXX XXXX, from about are are of our growth of strong the running”. the they've highest in and deposits deposits. over And since we four deposits

last highest We strongest from platform. I'm the the several to planning ever “our the inquiries more January And in from are for week in finally closing, the future business the have have we've shifted full years. the experienced”. action. excited even experiencing numbers alone Welltower in I inquiries across In been immersion about opportunities

have platform are to as leveraging our expect that in as we operationalizing more and This we analytics workflows We proprietary occurring drive underway, right data in our results. the workflows many to expertise a the the bear years operator is opportunities. I outperformance and to experience data employee expect of and future the as combined process several improve now drive drive as our and expressed appreciative fruit immediate the to come. Each which warm we financial operators and quarters unique and customer leverage experience operating welcome results. care to real we continue be by has and company estate our excitement to well

very and needed identified their implementing offering to case, where together software from working years old. tool we improve to well analytics practices XX best applying been over have a data In business. support We one

they high margin say, is delivering, substantial the As over I'm office and excellence operators now to basic growth board quality match Tim. of are sales to I'll back their they bringing call to will years turn operations come. called and 'XXs drive which want deeper confident the significant the up the to the and care implement across the opportunity the there operational back. a in

Tim McHugh

of Welltower to of fourth quarter. income share, per our share results. to operations diluted sheet quarter, balance quarter first reported per segment relative our on for our per attributable Thank and $X.XX quarter of stockholders and the to diluted net normalized update the and focus outlook triple-net in investment common guidance $X.XX finally our activity, of comments fourth our My you, capital John. from liquidity a Performance the today $X.XX XXXX will share. $X.XX funds

included $X.XX not government $XX or budgeted. were funds HHS million previously per grants share Our approximately and other diluted that results out-of-period of

portfolios. lease Turning to our triple-net

stats lease portfolio our a in coverage and triple-net a As quarter reminder, arrears. occupancy reported

trailing these portfolio, triple-net of the on statistics on and reflect driven In rental months by collections, X/XX/XXXX. year-over-year, senior increased increases cash tied leases currently to early our X.X% So at the XX NOI improvements in housing same-store recognition impact CPI. rent

We trends expect the impact of these both in to XXXX. accelerate

collections to rent was improve X.Xx. XX% leases escalators. As given our coverage of that Trailing XX-month subject EBITDA are API-based

first housing senior half XXXX inflect Looking positively expected as positive to in our portfolio. followed in improvement the forward in we operating fundamentals coverages the of trends year-over-year expect

X.X% same-store post-acute long-term growth. negative NOI generated year-over-year our Next, portfolio

our expect X.XXx. recognition to XXXX senior through to as we currently on was portfolio growth Trailing EBITDAR in triple in leases similar XX-month rent greater coverage housing However well CPI-based as improve rent escalators. net collections NOI cash

$XXX dispositions Over X.X%. cap of at million With blended million the contract XXXX course an of post-acute we sale long-term completed at under a additional for year-end. rate $XXX of

year-end previously growth a just EBITDA was X.XXx. long-term Health total of joint comprised coverage the with improvement Genesis of post-acute X.X% in-place of Care The by the year-over-year in sell same-store been sequential our System. XX is contributing largely NOI assets trailing negative A XX-month health which result, versus X.XX% driven have was at at Senior ProMedica Had announced NOI of XXXX. ProMedica decline that and agreement portfolio driven point represented positive systems by basis of venture EBITDA. to the coverage exit our And end relationship. XXX XX.X% As lastly our

As those remaining of held XXXX with sale year-end four assets for the sale. of we completed of the

Turning activity. capital market to

opportunities at highly those and visible near-term the unsettled program payoff fourth continue to sheet million million weighted expected utilizing we've pipeline our position XX.X expected sold Since of $XXX million. strength property of balance remaining disposition shares enhance proceeds. are price the sale of an to our transactions. of loan and We for via XX.X quarter, company This addition million. ATM forward fund $XX.XX which robust average beginning to expected currently agreements deployment of million capital per approximately proceeds our $XXX to and by capitalize generate initial share $XXX proceeds We to gross shares is have in the future

During with $XXX in debt of issued million maturing the also XXXX X.XX%. quarter XX-year a of coupon unsecured we

last in timing proceeds disposition expected year later equity rate a X.XXx. strong issuance discipline investment completed similar bringing decreased of adjusted full is net by factoring quarter ended of quarter. down in to in year-end cash balances issuance slightly the X.X very the and with borrowing in quarter. quarter restricted and from liquidity We unsecured debt heading we ratio of When billion in with the years net position the combined liquidity to completed Leverage investment into capacity XXXX. and mentioned their Following billion of a EBITDA At when is with billion strategy in pro our of of If annualized fourth credit. are cash our coupon of X.XXx debt the line impacted X.X%. to $X.X activity $X.XX XXXX, exceeded $X.X the position an forma activity billion adjusted to funding unsettled of on proceeds this the average $X run combined our impact third net we ATM previously EBITDA net

occupancy expansion occupancy the XX and top basis sits EBITDA higher spot portfolio points rate XXX recovery recovery than ending XXXX points is with quarter pleased basis portfolio of a depressed housing line levels. the still quarter, at powerful as of points growth basis Setting stage very of portfolio the significant base. pre-COVID to a momentum also prior operating senior for continue end our below the The our coupled margin upside but occupancy strong We in with levels. with peak XX.X%, below be the

guidance we Lastly, $X.XX to outlook share HHS share of diluted FFO common the midpoint. to This normalized moving night consideration attributable to $X.XXX diluted to into in share the at takes expected be per our of first million or per $X.XX or per share income received quarter provided stockholders $X funds $X.XXX net $X.XX of first the approximately and quarter. for first $X.XX, outlook. Last per an of quarter to

of housing by guidance $X.XX $X.XXX excludes long-term and in Excluding $X.XXX as $X.XX the systems, recognized operating of quarter outpatient our to growth recognized increase driven NOI is Canadian finally I the taxes. This represents a is XX%, X% the guidance XX%. occupancy G&A quarter funds, sequential this XQ, FFO estimated of same-store Shankh. adjusted senior number housing income medical, Underlying revenue increase growth; HHS driven growth and increase HHS over growth is this growth X%; activity X%, revenue operating of first quarter. quarter share an sequential increase growth housing portfolio average to sequential X% of and investment call points total first basis an out-of-period and triple-net, will with a by subsidies to which subsegment for X% year-over-year $X.XXX senior health portfolio composed to previously hand X% $XX approximately million share in X%; X.XX%; XXX $X.XXX and of of per fourth approximately expectation and post-acute, of per senior the from increase. from Underlying And an of midpoint of offset U.K. of that, year-over-year back

Shankh Mitra

call Thanks, comprehensive is Tim. don't we talk this about our that to something addressing and by usually I conclude wanted you team. that --

a -- we overhauled completed scalable turnover, was the to volunteer create we have Historically, alpha We as out upgraded brightest have majority capital or the through expertise. capital. raising astute allocation been predictive deployment the best the building our low platform. a created of continue such to With hire multi-year deepen and truly of further and team analytics this to and effort extremely our areas completely new

team this the XX also frankly, have a This and, of team Ferry years capabilities. Menon. value development for shareholders that and of an creation is John out piece started to our we asset excellence The the our the out John and a built last for come. world-class though, Over leadership industry-leading out significant will months, Ayesha of with Mike building last under in is management puzzle very XXXX. operational accelerate building hiring

We of likely cash XX spring new asset add last another people platform the of a our company follow year today. XX Many to net have a understand in that colleagues XXXX. is you during who We like spent added closely and we're coil our heavily occupancy are is be pandemic, which its about platform and with most sitting our realize also assets the thus released side flow, today. forward low people these but coil to a is value. to surge spring full of business Similarly and

You their them that, please line, line in are to in the seen seeing beyond. only and G&A be for but will open full call revenue operator, the contribution XXXX questions. With up

Operator

Thank Raymond the from Please [Operator Jonathan comes ahead. sir. line of Our first question go Hughes you, from James. Instructions]

Jonathan Hughes

several of years? past investment relationship operators few And in good a I in or you had out you've seniors relationships the Are headwinds. over I'm I success a as ask than remain larger high-quality years maybe past smaller many pandemic-related operator or an terms those a couple have years. what pipeline with? morning. wanted over after that industry. and individual the the have they what's don't in volume opportunity the just with established about Hey of Thanks. the know of the of already few quality size landscape relationships you generally wondering in few housing of looks to the opportunities? the there like progress But how the

Shankh Mitra

Jonathan. Fantastic question

now of and that they'll this think to a -- a I for relationship. don't probably that and particularly think can two want of can have I US-specific in is US be I right comment specific have UK relationship said operators that the As that we today Canada, operators two I same

quarter we're already have and to talk hands about One quarter's of had going shaken it call. probably them this we likely our next

see base are to to build. you generally platform what that So, wanted the is we the likely we operator that means have

assets out generally recall what talked acuities right? of types that we running that those, ideas have different And and before with that of the be you of about kind right? a we would kind of map. be in that We different operator map, You pandemic of map where should we should feel have

but $X a another we're Instead the billion how deep. talk broad of thinking year But instead which of talks what us to housing, go we'll over last, going call going relationship Now, medical that's to XX think we're going It's And or significant you're three and are external it an housing. that you $X.X decade we of you're deep that across significantly see sort of about senior can have office, for slide very wireless going could we come. our sort upwards estimate going not have we to take just -- that platforms asset go see All broad that opportunity see it. a about relationships talked housing, operator XX months, to classes growth going be seen give very a XX deep. and growing of creates this to we hopefully senior pretty you all a we quarter. XX about of that exceptional on presentation billion, about next to

Jonathan Hughes

you. Thank

Operator

question ahead. of next Please Nick comes our show the I Joseph go from Citi. from line

Nick Joseph

with challenges agency staffing talked the Thanks. the John about model. you

business this less in rely times the expense limit you to on forward out or you of staffing, perfect COVID, change use coming agency change to model crisis? the more it's actually do about to of storm hard to think going expect where As of or load is a

John Burkart

abundance whole just small that a is what world think No, workflows No. the But I a a a historical an part an standards Yes. has to piece. further going changed where frankly, scarcity agency Thank agency is with on where situation get even of there's the the it's the employees. picture has you, expectation will very employees diminishes to was gone my that assistance strong because chance back business of was least from at Nick. of

that. good to look they things. has at KPIs figure hear would the the is looking sales The changed and recognized employee they're the at to They're what value a has Recruiting employee so trying have looking set dramatically. one recruiters, optimize. words People proposition experience how how become et changed fundamentally to employers don't that you with And now the out never that cetera. that are machine at experience for

should that are hours drop work realizing big start hey, A on we changing. have like, it hour us, changes some are at your that deal school. employees, we are perfectly not some and things can't when their move change off an are So because to children like going works here, them. of a it They people because slightly they for of lot for for

care I great overnight. think And to tail hardworking will perspective, employees. further rate for take diminish it great. comments, for run, run will it I time I my will So be from long will be think in so It my off, as agencies. won't the this for health it's the happen operators. mentioned But the great But

Operator

show Mizuho. you. from comes question Thank our go I of from Vikram line Please the ahead. next Malhotra

Vikram Malhotra

Thanks so much for taking the questions.

growth question RevPAR two rent margins, and just it. a just on parts and to or So

and XX% embedding in are it, to but pricing like power? it is how like seems incremental you're on of or pricing the seeing your this one expectations But about and look the – can right it's the margins you're part, are? maybe to seems at Just seeing And in about strong in incremental between XX% today your thinking you you're margin, maybe in-place in then what not releasing, the it's it talk spreads your the just the reasonable. bridge, context way bumps the you mix the bridge a

John Burkart

Yeah.

I'm to to you there that – managed on questions and good. was going So two get – the

that are on fees fees the significantly. itself. reversed re-leasing that's market, that community – effective waived were that On markets They all versus clearly, and the were well the concessions – concessions were up community given net

recognition up the a a to zone. certain we're cost in marketplace care XX% expectations money come a to mid-X%s provide the strength of amount lot of that seeing you and go back of it that's that an that's is one point made the changing. below market in And are previously, from pretty in-place certainly, significantly. overall perspective Sean the rents rents were And at if in What what now people and great want. with that industry, place moving and so Very and up in gap takes comments with consistent the

Shankh Mitra

to on pre-COVID back second Vikram, slide. that your to we question, the margin getting answer are you

that, slide will But XX. you cost. no labor also I higher think pricing have have if referring remember, There that power is you to you're question improve.

extent that you see is back in of you costs, for So But power QX you upside margin there to of QX XXXX. excess margin. higher higher labor in to margin it to that was portfolio the have getting will the XXXX that, pricing of

Operator

show you. comes Bank. ahead. Derek go Thank next Deutsche Please of I line Johnston from our from the question

Derek Johnston

Hi, morning. everyone. Good

billion investments. So had in gross XXXX, in you $X.X

beatable XXXX in to the high call? number watermark? or anything off deals acquisitions or last terms our changed of your year? opportunities start repeatable is level source competition do XXXX, So even to believe that your this solid of you a ability Is so since even here in has And for

Shankh Mitra

is, yes. The changed? anything answer Has

the children cost indicate, our of So What – side cycle have had you Then from they side of had are we the you you see about, been if been XX average over of the can buying you XX, on about. of those of we think what employee focused saying a is have supply all right? are disruption that would disruption what as from assets mostly to because we that, talk situation these variants. because we age the revenue

the – obviously, over you about XX pressure which it cost. changed come is XX financing And the can has has didn't cost. loans changed that third All for just have imagine in yes is Fed Pretty Something you the outlook financing loans, on from to right? construction are is pressure last higher XX a to how that is And the there, if made loan. all the construction what look call LIBOR, LIBOR-based much days, variable something call it days. last you at

opinion allocate simple a how we success is not but shareholders. the in the measured The That's changed. to now team We're a the or beatable. not, If for value-driven investor. to volume-driven at capital. So not something enterprise do volume investor. answer growth part going of existing of this back it. value it. has part is level And is least to a very simple. value of just acquisition that team We're our question will is will is share creation do share not create we our not If there possible The a a

long as it. that we'll So opportunity is absolutely do as there

Operator

question next go show Evercore line our ISI. ahead. from Steve I Thank comes of you. Please the Sakwa from

Steve Sakwa

circle the you I levels I wanted as same of in you occupancy sure you moderation? to or and And that just revenue Tim elevated the just was some the QX? talked assuming the Yes. what make included Are XX%, side I bit guidance level I the saw did think QX, guess back in what about little sort is QX in then what a In on to rent? was you assume understood. Thanks. that growth from expense show. for Again,

Shankh Mitra

Thanks, Yes. Steve.

on of a assuming growth. that basis revenue driving the XX% revenue points occupancy So on year-over-year XXX increase basis side we're

So look is agency sequentially, lot think on driven talking revenue of at being expense growth it remainder a the is the way side, we're by rate. to the And labor. I about that best

fourth XX% a trends to early are reduction that's quarter from supported assuming by we've that seen sequential agency pool. quarter We in about in the first quarter. labor in And the the

Operator

show of comes Thank go Morgan ahead. the next from you. our Hill from Stanley. line I Please Rich question

Rich Hill

given Hi, good street renewals two think X.X and the think what guide notes updates look year Based you talked we you could through to XXXX, Wondering for but trending. talked if might some morning, any faster just your giving about And as about my like? think were X% that maybe renewals. as I on there you're times year had full provide upon I XXXX where times not bread back XQ rate. a on full of to competitors are street I renewals crumbs guys. one rates recognize have

Shankh Mitra

fees to that up the moving we moving Not moving, you pace necessarily, had, is rent. rent because are of The is Rich. were the lack is net effective a given, made of about the I seeing effective rate but Hey, just effective concessions talked net see. is John street And that. continue the obviously, street that the rate you that. comments community net because

some have In fact closer. now seen very In-Place [ph] gotten a we large at – Well have of moved much a rate couple rent, our of operators street operators couple have our

in shop. the pretty occupancy, on And walked revenue. XX% labor, if the just second means, from rate that We're cost, So look optimization the on guidance, and through future. obviously sort as are component question, you ultimately sort a right, revenue you it Tim encouraging it's right? that of we that which of answer about, So a component have a our occupancy comes we at And focused of is you perspective. gives to doesn't. higher you revenue, of rate think top not to which just necessarily of with one the one of

blends should NOI in XX-ish and things So accelerate expand reasons, XX% growth of we're sort we build growth get NOI right? percent get is year that that's trying One as to of is, in obviously to margin will that will occupancy, talked point. about a QX, and which together to QX, optimize the what all marginal your those So right? for obviously, continue two as growth revenue you we to you one

the of sort get a you of labor got. burn-off of continuation agency will you Second, that

of second an these you of as the growth the sort of acceleration we together, to of get half NOI two So that's year. get will things

Operator

from go line Please show I our Markets. ahead. from Thank comes next of Juan Sanabria question you. Capital BMO the

Juan Sanabria

about of for morning. their XXX time. basis year guidance occupancy target. one the operators giving not larger Hi. you're of Good in the to Thanks growth full to the for Recognizing again points XXX the as year space talked

feels you the business. given particularly outside new So curious wave, in don't you any of excluding that the seasonality And necessarily you apparent typically gain is COVID occupancy to feel quarter. how third still how

about commentary year. for targets for and curious growth your So, just occupancy the general

Shankh Mitra

Yes.

you that's So, of not So any will a a to disruption first, in to got said I'm year there the venture are mentioned right? you there. I look a despite going guess you you will new magic QX. And what excluding of variants, it think word, Last a that like. massive what more couple things very tell important about.

at and documents. to hole you had basis loss, you You've got to build climb point a up started average to occupancy a get can a an that where hole significant on out you big

point January, to don't you about this January from this is perspective. problem So we which points, will down make our occupancy the that seasonality had probably right? January XX point have John best ever basis year, talked is

So, you climb have to out. a don't hole

Second, this you better have demographics year.

see the demographics You is can building.

lower number -- to if into operator then that playing your we that's more there John data So did we a we year, like better venture disclosed other and on on not his card, have to significantly under by of all this like. don't that hopefully, you get have for of or year So going entire deliveries script out if sort year, the you I'm assumption of and translate and will what specific -- sort of demand leads right? try four comment and hit growth. waves is to guess occupancy any last look going a

out we out, because optimistic just in this table trends see a we're But what the how on see occupancy things long-term year. the we'll of quarter versus better of pretty If investors. the all quarter, we're these set. plays focused not underlying we discussed However, but We're is lay that marketplace.

Operator

comes show Please ahead. JPMorgan. of I line Mike question you. next go our from Thank the Mueller from

Mike Mueller

hi. Yeah,

entry transaction, just versus between assets the the Just difference was rental, I a rate of terms rough fee curious pricing in difference? what on like cap the guess Watermark the

Shankh Mitra

things deal, agreement these Mike, into we're not specific the alone specific know as going not to it. get that to sign within into out the right? let seller. Obviously play deals, with is how things going confidentiality you a We're a you get

signed. these have are about some estate thinking dart; a put into we like in per get was land and have that of we specific of violation agreement price that the We of that alone parts That were have there a but I the underlying think of With to you value a be dart, deal. very let as all with because think do lands in of exceptional different ultimately is what us combined created about assets the last unit investment portfolio that confidential just excited deal, not you real economics the this to three, with significant we're what three us; it transaction the to going come can we and only. talked about we attractive that of we're you to about those is A, the about believe what got, B, will call and very

Operator

the comes our from you. Connor Thank of Please from show Berenberg. question Siversky line I go ahead. next

Connor Siversky

morning call. I focusing keep in the approach. in consideration me particular investment want this senior on for out to just Good there. value-based on having housing the Thanks simple, of

the or this cap positive your change mean compression pricing, And increased then this in more end? perhaps rate do I granular just activity restriction in set expect some see how transactions expectations year to mean, your on on end does So or Does opportunity environment you? this on that for you a for competition?

Shankh Mitra

point. said. will I'm a a Yeah. floating going rates changed significant of even compression. expect Senior Connor, stabilized What rate, rate put rate more this repeat is hard coming. but even done about coming on to at rate very cap talking context is I cap And a hard floating you're basis loans buyers. is earlier. in anywhere of a the system. cap done majority stabilized point not are just them you all construction is stress believe that's to stabilized I have rate increase we're of to that housing answered this are basis. not there LIBOR a significant going the what if I And if pipe do not a stress that's of to do not is question in potential cap on I because there's be concept. It is the that's the And second

telling think I that talked all right? historically many looking growth investors no asset the about underlying for X% sense, was growth sudden paying that quarters example It people at we curve CapEx you a for who forward that institutional versus I've given rate and the me fact, makes after are rate. at In for talked MOBs breakeven made lot with of outlook no are own classes including for others. inflation to we quarters and of sense what what about inflation

growth waking So like obviously side, people make think a I the We that's the of on the market. return? is investor that's a And did these refuse institutional up understanding nominal what up how through going to things and your what be buy I That's we're I and for at why Finally, your think reconciliation seems you we are at it up. show about think to to IRR buyers. a the exit. And this to there real to have you IRR, when to show versus say is long-term do has look there chase going growth.

in You that and discipline not and difference going to done have seen that for years was we forward. there years be have any going

Operator

Thank you. Please SMBC. I from Anderson show our Rich go line from next ahead. comes the question of

Rich Anderson

you too your mentality a that have big the Shankh when versus system you to elephant morning. be that is an hunter and But noise the that said good different and Thanks get likely in past in not you predecessor. I appreciate you go are can that.

from as hunter you see there the would you're perspective million the on could not price your you're anything on side, towards… a that that a buyer is willing could mean sell average deal $XX what sales the be average do buy you deal -- that I if mentality if elephant price given to side be be think So an

Shankh Mitra

to wholesale buy it at and number you XXXX on We buy is ultimately at the sales money. of $XX right? Very sell very capital the how money It's Right? buys, at Look sell be is you are mentioned. look the to billions that million many astute sold. high. make looked what sell allocate And simple and you $XX multiple question. what how you multiple but it's right? do -- buy investment no That's That retail. want something matter million Fundamentally low, class you and how make is what we to retail we I we good a don't that extremely disposition see if exactly done observation. were will of is, know likely

portfolio So portfolio the market that of to when certain there's class buy hunger a are. asset in we a premiums lot

the $XX how I was real transaction go bought but billion of median that smaller you of the assets size buy of the we not create value. median-sized we you $X.X transaction think sell size portfolios mentioned building median we So million. That's

Operator

you. Thank

Pawlowski next ahead. our from of question go Please Green line John comes So the from Street.

John Pawlowski

picked signs or SHOP the in actually the the vacancy type in structurally either for not move John geography recent as there or maybe is improving you within care LIL or sliding here? time. by are where portfolio higher months -- just memory rates any occupancy percentage Thanks of through property portfolio

Shankh Mitra

Each area course No. The is we're that board. point improving is of pretty the right at across now low. starting

get optimal this build more good Board. is would may to So, is be substantially the some a the from that an at working question everything there across be to in time But and point is level higher low become bar we things question your apparent. which as

Operator

of comes Please ahead. Thank you. Capital from I go Markets. Carroll from show our next the line RBC question Michael

Michael Carroll

you Thanks. quantify many I rents basis current And wanted tenants recognized portfolio for cash to triple-net compared what's the a on Tim on cash can between transition the today? being that's leases? are triple-net how difference a to and the contractual paid second. those

Tim McHugh

quarter sorry So XX% stayed about quarters. kind most last the in XX%. for it's the first that quarter -- of few within It's of or the to fourth range

rent the is that's of of right So don't now. recognized And the cash contractual being have I to that on quantum a in-place kind basis. how gap of much

Shankh Mitra

underlying underlying going of they're on Tim UK, is recognition you. by inflected to the US be because is Tim and But same-store on is this translating obviously significantly, triple-net inflected just all up can that in growth which many putting housing year, right? our on expectation Mike that or NOI remember, we cash, talked the calls. senior And cash In see eat Syou portfolio we and it about took sort is words, triple-net NOI hit that gave flow that is other what much how expected that, obviously of into cash

on Now, the of we're that. other side

Operator

show go Valiquette comes of Please ahead. from the from Thank I question next line Steven our you. Barclays.

Steven Valiquette

Good Thanks. morning. Great.

And the labor I'm any all I million with as commentary well overall. a has the definitely color also, markets? more whether quarter. evenly spread maybe agency it the was SHOP in that since on curious concentrated labor or portfolio, of fairly few the footprint did SHOP absorbed So the $XX of helpful. urban was an further geographically fourth for your Is expense you in that in guess, across expense on geographically there find

Just in less whether issues more rule any Thanks. in just generalization shortage are from versus labor or your prevalent urban markets view general?

Shankh Mitra

we've stress particular markets moving zero labor stress a that looking some thing in which forward me gives that, a of because to – you tremendous in of assets have awful optimism this, what no analytics selective cases, had And solvable. at and it in of cause came opportunities in The other great agency. my The an this clearly, are cetera. identifies can cases of issues, issue In team. that find is studies a amount have Sure. specific data to back That's impact level a great leadership question, market. it selected assets comment and occupancy indication, Omicron have leveraging of of great one have done But that's solving on And interesting agency and found is other also they lot a out to is material issues. our et dig on closely, belief when assets lot gets of of that combination lot a some when is partly, surprise. and the on then is a and that, a issues my leadership. And deeper you we but frankly tie leadership the amount staff, issues

situations make improve we'll going we this helps as that identify forward dramatically. will – So us frankly things adjustments, some

So hopefully, that's helpful. Thank you.

Operator

Capital show I comes the from KeyBanc our Markets. line question from next you. Thank Sadler of Jordan

Jordan Sadler

guys. you, Good morning. Thank

Shankh Mitra

morning. Good

Jordan Sadler

labor I of to two-parter. a embedded this morning. sort little Good is bit the wanted to of – wanted One XQ. in contract clarify, I a assumption

I said think XX%. down you

pressured you ended that for sequential XQ, numbers decision the time, of to the separately, up that million significant it? how particular, first $XX in you in in front surrounding the in of the headwinds, with your original providing appears the flat on what $XX quarter? were. portfolio conservative ended We think And of way to for points to moderation seems your about for to Last that guidance variant that a expense up words, expenses? XX the million. first So right? pretty the curious, the kind becomes lower late especially lost a occupancy impacted of basis be And quarter then about only for kind and experience the cadence fourth just right? Is of the labor this thinking guidance surprise SHOP quarter I'm fact relative quarter relative despite January. other in what sort assumption overall, In guidance expectations much gave

-- asked I've about the there, that's So asking know a basically but lot cadence I'm guidance. on I giving

Shankh Mitra

Yes.

don't Jordan, I So, why and start finish. will Tim

First period weak is, understand from QX seasonally an occupancy I a is standpoint.

So picked lag some And as kind tours we're about, talked get days January XX points. to lag, John thinking picked we're XX sales as sales pretty about And of have you up we're in right, occupancy. call sales activity up. picked down to it significantly, from thinking XX up obviously, the basis

at of quarter. sort kind of that you end of puts the the So towards

that speaking, call that to sort thinking I just of want lot about. up But The have think what going So call sort pick of generally downs don't I right? and occupancy, we what to conservative, you we're happen. a to time and -- understand you a that was up right? of I would So cares. wouldn't that who

down points. XX XX, I average, goes that You mean, right, will on basis QX, quarter about average, are occupancy

So about think average probably outcome, about days. you year, get to QX the that the which for significant just It's That's pretty what will have not right? a because flat, growth. you rest of of put an flat sequentially good means year-over-year

results can we bottom And And not The into frankly quarter. And we it. about highly hard go specifics earnings when what Omicron it as about the did it did. have it's the second happen. platform. pretty disappointed I at knows, hit and or rate mean is no We the more look, seen, infectious see two impact am today. focused XX the we're us least, that the quarter-to-quarter, will power ways what's I days speaking, on you point run who way that is, There's we things to what comes of line see there's Jordan, like it's mean, right? get to in in QX. exciting, I where how real expect But pretty

You business, driving an operating prescriptive going about very, exactly sort is get to play differences, hard very things right, how the comment. try have to which are out. marginal It's of to

Tim McHugh

that Jordan. add the piece labor I to would agency piece, just of

greater the over happened we've But what two is happen correct variance think step in on disruption very kind we're of the that expectation, down. labor the the been waves seen fourth disruption, last much that, is over And than disruption. is the So the the was quarter wave anywhere, your has I like, what a don't the demand necessarily in particularly the significant certainly, math way Omicron forecasting. conservative changes, and in labor carefully

certainly, way So, inputs forecast changes the it. the confidence around you and from levels

different of make uncertainty is impacting being we labor the it's variants conservative, the right it reason -- and term. So that it's probably more longer-term being now. in how have piece the -- It's the lot of a why labor market, forecast a short to a there's biggest

in good think, in little I step assumption. a the early trends down pretty I And I that general, we of think think, of view going agency. more seeing supportive half we're stands the I be weighted. back it the are So, very still January as our to in said earlier, was a on thought quarter bit But,

Operator

question from Yulico Thank line Scotiabank. ahead. Please the from of go your next you. Nick And comes

Nick Yulico

agency up I Hi. Thanks. to question. this here just follow on want

$XX costs for quarter. sounds to million be those So, it going first like it's the in about

quarter, it million. $XX think, back I If the third you go was to

assumption is why cost. about of away goes you're a and driving your market that bit then? at which hear use agency about X% it's a your And of for and trying versus to up that's issue the confident expenses still not expense why COVID little more some a labor that So that point just tight issue

Shankh Mitra

care color have worked it's workers period long tirelessly on both. and doubt got the it, unbelievably, the quarter take fourth both. health they look PTO And health not Well, did some care for workers who long, more that of No some at worked you've it's about is of you time. when a all

and increased add get agency. you of you Omicron season then holiday the result PTOs had So, you the in and that occurred around

So, of as agency It's Uber. is usually high two to surge three times the like kind rate and got it pricing Xx. as

the But away again will workflows in backs that of working. each hiring is as all So, they're lower operators my to regardless to that the of expense the increase back hours. and going comments have reality play the

situation. The came. the just it PTO that So, a was and of unique Omicron combination

But So, I item a it won't am exactly over be the that how is time. confident be long-term industry. it it will abates in

Nick Yulico

you. Thank

Operator

Tayo of line Your ahead. next Credit Okusanya go Suisse. from question from Please comes the

Tayo Okusanya

UK. Curious the big right idea that you're they everyone. Central the at Yes, and the how assets here it be intrigued I is Brothers bit London? of the transaction. assets over all about Sunrise Xnd idea high-quality there? tend hi JV more that the little kind in own Is by over going to wanted become the like could given that XXth in a time to to again to building Rubin I'm talk stuff

Shankh Mitra

a product. JV the like idea fact there reflect is of US lack to society The just is that expand aging UK is and is aging the high-quality to society

Street, own at assets And at around the include Sunrise United the could you to Kingdom. grow by If we're opportunities that prime the and East Rubin pretty of doing well. that lot looking you lands and of opened which platform mentioned billings about XXth way obviously this just a extraordinary is think quarter like a lot trophy and

If you the New asset want are know. to in York, let us visit you

assets. but the the we're well. just COVID be, there, and all which pretty story noise have demand out to it But very through of playing is Finally, doesn't can some trophy be early seeing

Tayo Okusanya

you. you. Got Thank

Operator

the show comes Capital from question of Bernstein our line ahead. Thank from Daniel you. One. last I go Please

Daniel Bernstein

here second. have morning. ask last a to I Good question

seniors slide So supplemental, And properties development you your housing. only talked about MOB your three I in ramping under noticeable you that up their looking development have everything almost when was at else pretty is team. it

want development So there whether opportunity an I cap value side, different with talk be there? acquisition on of was the hoping certainly lack a you MOB four there the the lack But on five assets don't side the about you side, environment versus and more lack to inflationary to the is of X% or is talked might you on growth. about story buy development of able

Shankh Mitra

Yes.

So, a of things. couple

MOB what's It's I is is is the pipeline significant. not you versus then been don't meaningful. the in plus south feet actually can million tell First, X square know that's reported pretty MOB reported. and very, our pipeline I that what's fully leased. very

senior as it's yet. So don't the while all senior it we senior reported been our as a of what all housing than rather What for business, house, side a housing bucket. reported portion because you is very it's housing one wellness house. the substantial separate the side development was reported out is probably not of activity on is But the see of

house, Street, million give On but $XXX XX mean, the is an very I targeted, very asset. the they're that's right? of side -- about a is buildings, I'll think which senior delivered they're you large example. So

Hudson You think about assets, talking $XXX-plus $XXX Kisco, is $XXX it's We million too. Brooklyn is about Yards assets XXXX asset. Van Ness $XXX right? that's roughly a asset. million million a million talked about

to that most it's special the reason and Van not make have substantial, perspective, number. number being, be very that actually properties of And there But you XXXX a San stop. right? they're trophy speaking, frankly other assets few Francisco about from Ness, that high. in Think difference where the than a going full the is very period does situations, So, to building

doesn't in it where the that's is today you adjusted of land. sense. doesn't sense will other my ultimate of know housing Brooklyn, labor executing. cost senior But opinion the don't rent make development reason, that, why we're a I So so lot than a entitled have do, And something the that in right? the opportunity. probably a special right a should fact think taken it's in XX Brooklyn got to Fisher now Middle just -- Club Country to that years about Brooklyn next we Hill, make lot And

fee-only And developer have it and if people there If it guess reason that out, else the own on these lost money who starting you're capital to no go for which mostly a if they works that. it's somebody right? I for-fee know don't just doing a just you're that. obviously is operator, are in or line, is And if I'm promote your You doesn't, the because money. great. have help no seeing a days

don't cost rate in costs, So higher high how So financing right? context based my construction of the particularly industry. goes that to see base LIBOR on very and just I loan back earlier it floating that I made just and point works

we're on that. year majority new confident are speaking get a are But our development makes side rates much, side the of coming through. nominal tighter by sometime an very wellness a so we I basis, when additional the on is on pipeline where explained your is the money is disclosure versus class giving So and their wellness rate a acquisition grows development. said you're with one, on I cap asset side and frankly X% still real what's to -- that to important house XX% environment to senior side, the going activity it someone you that's not I cap how And house -- very lot about this said in the we'll on the house about more one me have create side no higher. much of on lands thinking the our inflationary focus the much of and the finish strong a see a the that where what much, on question I'll the margin a as value basis significant has on with just you inflation said saying of

And will believe acquisition unless that. me explain to be yet on somebody's not active side. the I that So

in said bought. gives was You it saw the a IRR. MOB X.X small portfolio I bought We a of cap, it which which right portfolio, multiple at for have we we bought level a Arbor high-quality years, you

Operator

you. Q&A you today's participating. and concludes conference That today's Thank call. session for Thank

disconnect. now may You

Welltower (WELL) 16 Feb 222021 Q4 Earnings call transcript