The Big Two REITs, Welltower and Ventas, continue to outperform the overall seniors housing market, leading the way in the post-pandemic recovery as the two largest owners of seniors housing properties.
Welltower reported its fourth quarter and year-end 2024 results first, and it was impressive. Its fourth quarter same-community SHOP NOI increased by 23.9% year over year, while revenue increased by 8.8%. Same-community average occupancy increased by 310 basis points year over year, and the NOI margin jumped by 320 basis points in the fourth quarter. These are unusually strong numbers, but at some point, the growth rate will have to decline as back-to-back 20% plus increases will be hard to continue.
Welltower expects same-community SHOP NOI growth in 2025 to be in the range of 15.0% and 21.0%, still not too shabby. The completed $7 billion in acquisitions in 2024, already have a few billion lined up for this year and they have $8.7 billion of liquidity to do it. Welltower’s share price jumped by 2.16% on the news and the market cap is at an industry leading $91.2 billion.
Ventas reported the following day, and its fourth quarter same-community SHOP communities posted an average census increase of 310 basis points, identical to Welltower’s increase. Hmmm. Same-community NOI growth was a very healthy 15.8% year over year, while NOI margin increased by 180 basis points. Both were below Welltower’s results, but still impressive. The REIT announced a 6.7% increase in its dividend, which certainly makes sense given the performance. Its share price increased by 6.5% at the open on the news, and the market cap now stands at $26.7 billion.
