Ahead of a scheduled Feb. 14 earnings call, Welltower on Monday published a business update in which the Toledo, OH-based real estate investment trust noted that full year 2023 net income attributable to common stockholders fell below previously issued guidance range of $0.91 to $0.95 per diluted share.
According to the REIT, the shortfall primarily was driven by a delay in asset disposition timing from the fourth quarter of 2023 to early 2024, “which resulted in a lower-than-expected gain on sale during the period, and certain expenses tied to transaction activity in the fourth quarter.”
Normalized funds from operations for the full year of 2023, however, are expected to reach the high end of previously issued guidance range of $3.59 to $3.63 per diluted share, Welltower said.
Year-over-year same-store revenue in Welltower’s senior housing operating portfolio was in line with previously announced guidance of 9.8%.
The data show that fourth quarter 2023 year-over-year occupancy growth “meaningfully outperformed historical seasonality,” marking the largest quarterly increase in occupancy of the year, the REIT said.
Revenue per occupied room, however, continued to decelerate into the fourth quarter, due to one operator’s large rate increases, the company said.
“The operator is expected to resume its historical cadence of January in-place rent increases in 2024,” Welltower said.
Expense per occupied room continued to decelerate from the third quarter “following a further normalization of labor market conditions and continued abatement of broader inflationary pressures,” the REIT said.
According to Monday’s update, Welltower expected year-over-year same-store net operating incomes growth to approximate the midpoint of previously issued guidance of 23% to 26%. NOI growth for the third quarter had come in at 26.1%, marking Welltower’s fourth consecutive quarter of growth rates of more than 20% and the second-highest level of growth in company history.
The REIT said it has $1.2 million of under-contract activity expected to close in the first half of the year.
“Building on the pace of investment activity into year end, the pipeline remains robust and is comprised of off-market, privately negotiated and granular transactions,” Welltower said.
