Welltower Inc. (NYSE:WELL) Q3 2023 Earnings Conference Call October 31, 2023 9:00 AM ET

Company Participants

Matthew McQueen - General Counsel

Shankh Mitra - CEO

John Burkart - COO

Tim McHugh - CFO

Nikhil Chaudhri - CIO

Conference Call Participants

Vikram Malhotra - Mizuho

Connor Siversky - Wells Fargo Securities

Juan Sanabria - BMO Capital Markets

Jonathan Hughes - Raymond James

Nick Joseph - Citi

Joshua Dennerlein - Bank of America

Richard Anderson - Wedbush Securities

Jim Kammert - Evercore ISI

Mike Mueller - JPMorgan

Michael Carroll - RBC Capital Markets

Ronald Kamdem - Morgan Stanley

Jamie Feldman - Wells Fargo Securities

Austin Wurschmidt - KeyBanc Capital Markets

Operator

Thank you for standing by, and welcome to the Welltower Third Quarter 2023 Earnings Conference Call. I would now like to welcome Matt McQueen, General Counsel to begin the call. Matt, over to you.

Matthew McQueen

Thank you, and good morning. As a reminder, certain statements made during this call may be deemed forward-looking statements in the meaning of the Private Securities Litigation Reform Act. Although Welltower believes any forward-looking statements are based on reasonable assumptions, the company can give no assurances that its projected results will be attained. Factors that could cause actual results to differ materially from those in the forward-looking statements are detailed in the company's filings with the SEC.

And with that, I'll turn the call over to Shankh.

Shankh Mitra

Thank you, Matt, and good morning, everyone. I'll review our third quarter results and capital allocation activities. John will provide an update on performance of our Senior Housing Operating and Outpatient Medical Portfolios. And Tim will walk you through our triple-net businesses, balance sheet highlights and revised guidance. Nikhil is also participate in the Q&A session of the call.

Against a backdrop of increasingly uncertain macroeconomic outlook, I’m pleased to report another strong operating results with which continue to exceed our expectations. Our Senior Housing portfolio posted another quarter of exceptional revenue growth, which continues to approximate double-digit levels, driven by both strong pricing power and occupancy build. We are delighted to report that occupancy growth not only accelerated through Q3, but also that September occupancy gains marked the highest level we've seen over the last 2 years.

From a pricing standpoint, we continue to achieve outsized rate increases as reflected by nearly 7% growth in RevPAR or unit revenue. As you may recall, we previously mentioned that last year, one of our largest operator pull forward its typical January increase to September 2022. This year, the same operator elected to maintain its historical cadence of rate increases and will therefore wait until January of 2024 to push through rate increases. As a result, reported pricing of Q3 this year may appear lower than what we are experiencing in the business and it bears repeating that our operators' pricing power remains strong.