Welltower (NYSE: WELL) has begun a brand new chapter with a fair narrower deal with senior residing and new incentives for operators and their workers – all a part of its latest iteration, “Welltower 3.0”
On Monday, the Toledo, Ohio-based actual property funding belief (REIT) introduced a blockbuster collection of transactions totaling $14 billion to accumulate greater than 700 senior residing communities, comprising greater than 46,000 models within the U.Okay., U.S., and Canada.
The corporate paired these acquisitions with asset inclinations – together with the sale of its 108-property outpatient medical actual property portfolio – mortgage payoffs “and different capital recycling exercise” to the tune of $9 billion.
Welltower is also launching a brand new “all-in” alignment mannequin dubbed RIDEA 6.0 with three longtime working companions, Cogir, Oakmont Senior Dwelling, and StoryPoint. Underneath the brand new mannequin, the operators will eschew a “good portion” of their incentive charges with the REIT and as a substitute take models of possession in its administration firm, Welltower OP.
To reveal their confidence within the technique, the REIT’s 5 govt officers led by CEO Shankh Mitra are for the following decade limiting their annual salaries to $110,000 and taking a single, long-term equity-based incentive award additionally within the type of Welltower OP models.
Moreover, Welltower introduced a brand new $10 million grant for frontline staff at top-performing communities.
The corporate is also overhauling its Welltower Enterprise System to additional cement its “3.0” iteration and standing as “an working firm in an actual property wrapper,” Mitra mentioned. All of that is aimed toward serving to Welltower reap alternatives within the coming decade, and produce about what Mitra sees as a “utopian concept of everybody swimming or sinking collectively.”
Though Welltower’s present inventory value represents at or close to all-time highs, he views the corporate’s outcomes as far as solely “considerably passable.” He added that the REIT seeks to disrupt itself to remain on the innovative much like how Netflix disrupted its personal operations by pivoting from mailing DVD leases to digital streaming.
“If you happen to don’t disrupt your group from inside, anyone else will do it for you,” Mitra mentioned. “Now we have taken it upon ourselves to remodel this enterprise digitally, to get to a greater end result for our clients and site-level workers.”
Welltower as of the tip of the third quarter of 2025 had 763 communities in its senior housing working portfolio (SHOP) and 246 communities in its triple-net senior housing portfolio.
Welltower’s inventory value registered at $179.90 per share by the point monetary markets closed Tuesday.
Narrower focus, new incentives assist create ‘Welltower 3.0’
Central to Welltower’s “new period” is a brand new focus on senior housing communities. With its current acquisitions and gross sales, greater than 80% of the REIT’s annual internet working revenue (NOI) will stem from senior housing.
“We’re doubling down our efforts, consideration and sources to our senior housing enterprise, with the singular focus of operational excellence by a digital transformation,” mentioned Welltower COO John Burkart through the earnings name Tuesday.
Exemplifying that effort within the third quarter was Welltower’s cope with Barchester Healthcare to accumulate a portfolio of 284 communities within the U.Okay. for a sum totaling greater than $6.9 billion in at present’s change charges. The portfolio consists of 111 communities managed by Barchester beneath a RIDEA contract, 152 communities leased beneath triple-net agreements and 21 tasks slated to be managed in a RIDEA contract as soon as they open.
The Barchester portfolio consists of stabilized communities and properties nonetheless in lease-up with a mean occupancy charge within the high-70 percentiles. Welltower had beforehand sought to accumulate the corporate and its care properties years in the past, however finally withdrew its bid in 2020.
“Now we have fastidiously studied many transactions that Warren [Buffett] and Charlie have accomplished through the years with household owned companies, and I’m delighted to tell you that this $7 billion negotiation was accomplished throughout a single sitting, with a agency handshake,” Mitra mentioned. “Our years of dialog and shut familiarity with the Barchester belongings and administration was definitely useful as preparation, equally essential was the integrity and professionalism demonstrated by our counterparty.”
Past constructing out its portfolio to deal with senior housing, Welltower additionally retooled its incentive construction beginning with three of its closest working companions, Cogir, Oakmont and StoryPoint.
“We’re attempting to easily align the pursuits of our working companions with our homeowners,” Mitra mentioned. “Regional density is essential to us, so if there can be alternatives to convey different working companions into the fold, we’ll contemplate it.”
As of 3Q25, Welltower is beneath contract or has closed on $4 billion of senior housing acquisitions spanning practically 40 transactions throughout over 150 communities. That features “trophy senior housing communities” within the U.S. East Coast area, together with in Boston and Westchester County, New York.
The REIT has, based on a enterprise replace, labored to “rebuild” its portfolio of communities within the area utilizing a “rifle-shot method to capital deployment, using its knowledge science platform, figuring out trophy belongings alongside the Route 128 hall and in triple-A places together with Brookline, Massachusetts.”
Included within the REIT’s incentive overhaul is a brand new program known as the Welltower Fellowship Grant. By means of this system, the corporate is ready to dole out $10 million in Welltower inventory yearly to frontline staffers working on the top-10 performing communities in its portfolio. The grant is supposed to additionally honor the reminiscence of the late businessperson Charlie Munger, “a person who meant a lot” to Mitra and the corporate’s administration workforce.
“Think about a world the place our web site degree workers work in lovely and welcoming communities outfitted with extra superior and easy-to-use instruments, liberating them from paperwork and administrative burdens,” Mitra mentioned Tuesday throughout Welltower’s third-quarter 2025 earnings name. “And so they receives a commission greater than they in any other case would in a aggressive neighborhood, typically in a major and life-changing means on account of Welltower’s grants.”
He added: “we take the straightforward concept of Berkshire [Hathaway]-style stewardship together with Costco-style buyer obsession, very, very critically.”
New ‘tech quad’ and ‘nearly limitless urge for food’ for tech investments
In the case of know-how and the personnel supporting it, Welltower is hungry for extra.
Welltower this week additionally introduced the hiring of Jeff Stott, previously SVP and head of know-how at Further House Storage, as chief know-how officer. Welltower additionally employed Tucker Joseph and Logan Grizzel to the newly created roles of chief info officer and chief innovation officer, respectively.
Together with the corporate’s chief knowledge officer, Swagat Banerjee, the brand new hires will kind what Welltower is looking its “tech quad.” The group will lead the REIT’s knowledge science, digital transformation and normal innovation efforts.
“Whether or not it’s know-how itself or it’s folks round know-how, we nearly have a limiteless urge for food to do it,” Mitra mentioned.
All of that is meant to assist the REIT scale back “latency” within the communities it owns. Typically, whether or not a neighborhood will reply to a prospect’s inquiry will be measured by a coin flip, Mitra mentioned. And when operators are getting in contact with prospects, it may well take as many as two or extra enterprise days.
Welltower believes that’s nonetheless too lengthy. Utilizing its enterprise system, working companions are measuring response instances within the single minutes, not days.
“I anticipate sometime that no calls will go unanswered, and … that can be taking latency to zero,” Mitra mentioned. “These days of operations are coming.”
Usually, Mitra sees the senior residing trade missing “actual energy of know-how to enhance day-to-day operations with a aim of enhancing the lives of residents and the workflow for web site degree workers.”
“With this workforce in place led by Jeff, Logan, Swagat and Tucker, now we have instantly bolstered our capability to speed up development and innovation. At Welltower, we embrace the precept that effectivity is maximized when distinction is best: the most popular doable supply paired with the coldest doable sink,” Mitra acknowledged.
