Welltower Q3 earnings rise to $0.54 per share
Welltower Inc. reported third-quarter revenue of $3.716 billion, versus $2.686 billion a year earlier, and net income attributable to common stockholders of $396.6 million, versus $280.6 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Welltower Inc. reported third-quarter revenue of $3.716 billion, versus $2.686 billion a year earlier, and net income attributable to common stockholders of $396.6 million, versus $280.6 million. Diluted earnings per share were $0.54, compared with $0.41. Nine-month operating cash flow was $2.677 billion, versus $2.227 billion; cash disbursed for acquisitions totaled $9.705 billion, compared with $4.041 billion.
The company acquired 34 Canadian seniors housing communities and interests in four unconsolidated properties through its April 1, 2026, Amica transaction for $2.951 billion. In October, it said it had closed or expected to close approximately $7 billion of seniors housing acquisitions through year-end, including a C$2.2 billion, 27-property Canadian portfolio closed October 1, 2026, and a 62-property U.S. portfolio of approximately $2.6 billion under contract, expected to be funded with cash and OP unit issuances in the fourth quarter, subject to customary closing conditions and regulatory approvals. The board declared a $0.85-per-share cash dividend on October 26, 2026.
4 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointThird-quarter revenue reached $3.716 billion, versus $2.686 billion.
- Moderate pointThird-quarter common-stockholder net income was $396.6 million, versus $280.6 million.
- Moderate pointNine-month operating cash flow was $2.677 billion, versus $2.227 billion.
- Moderate pointQuarterly dividend increased to $0.85 per share, versus $0.74 in 2025.
Negative
- None.
Filing Explained
Welltower issued 34,646,633 ATM shares through September and sold 1,622,950 more in October, reducing existing holders’ percentage ownership.
A Form 10-Q is Welltower’s unaudited quarterly report. Welltower’s July 2026 agreement allows it to offer and sell up to
An at-the-market program allows an issuer to sell new shares gradually into the open market at prevailing prices, rather than through one priced deal.
For the nine months ended
Key Figures
Total revenue: $3.716 billion (2025: $2.686 billion)
Net income attributable to common stockholders: $396.6 million (2025: $280.6 million)
Diluted earnings per share attributable to common stockholders: $0.54 (2025: $0.41)
+5 more
8 metrics
Total revenue
$3.716 billion (2025: $2.686 billion)
Three months ended September 30
Net income attributable to common stockholders
$396.6 million (2025: $280.6 million)
Three months ended September 30
Diluted earnings per share attributable to common stockholders
$0.54 (2025: $0.41)
Three months ended September 30
Operating cash flow
$2.677 billion (2025: $2.227 billion)
Nine months ended September 30
Cash disbursed for acquisitions
$9.705 billion (2025: $4.041 billion)
Nine months ended September 30
Amica acquisition purchase price
$2.951 billion
Acquisition completed April 1, 2026
Cash dividend per common share
$0.85 per share
Declared October 26, 2026, for the quarter ended September 30, 2026
Remaining ATM Program capacity
$4,859.303 million
As of September 30, 2026
Key Terms
triple-net leases, RIDEA structure, ATM Programs, Exchangeable Notes, +1 more
5 terms
triple-net leases financial
"under long-term triple-net leases"
A triple-net lease is a rental agreement where the tenant pays the base rent plus the three main property expenses: taxes, insurance, and maintenance, so the landlord receives largely rent-only income. For investors, that means steadier, more predictable cash flow and lower day-to-day operating risk for the property owner—like collecting rent from a tenant who also pays the utility bills and repairs—though rising costs or weak tenant credit can still affect returns.
RIDEA structure financial
"held in a RIDEA structure managed by Barchester Healthcare"
ATM Programs financial
"referred to as the “ATM Programs”"
An at-the-market (ATM) program is a way for a company to sell new shares directly into the open market over time at current market prices rather than all at once. Think of it like a business slowly topping up its cash register by selling small amounts of stock as needed; it gives the company flexible access to capital but can reduce each existing shareholder’s ownership percentage and put downward pressure on the share price if used heavily.
Exchangeable Notes financial
"referred to collectively as the “Exchangeable Notes”"
Exchangeable notes are a type of financial asset that can be converted into shares of a different company or entity at a later time, often at a pre-set price or upon certain conditions. They matter to investors because they offer a way to potentially benefit from the growth of another company while initially providing more safety or flexibility than directly owning stocks. Think of them as a convertible ticket that can be exchanged for ownership in another business if certain opportunities arise.
variable interest entities technical
"borrowers typically represent variable interest entities"
A variable interest entity (VIE) is a business that a company controls through contracts or special arrangements instead of owning a majority of its shares, like steering a puppet without holding its ticket. Investors care because these arrangements can hide who really bears the financial risks and rewards, affect how assets and liabilities appear on financial statements, and create extra legal or enforcement uncertainty that can change the value and risk of an investment.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue did Welltower (WELL) report for the third quarter of 2026?
Total revenue was $3.716 billion for the three months ended September 30, 2026, compared with $2.686 billion in the same 2025 period. Resident fees and services accounted for $3.121 billion of third-quarter revenue.
What was Welltower (WELL)'s diluted EPS in the third quarter of 2026?
Welltower's diluted earnings per share attributable to common stockholders were $0.54 for the three months ended September 30, 2026, compared with $0.41 in the same 2025 period. For the nine months ended September 30, 2026, diluted earnings per share were $2.16, versus $1.26.
How much capacity remained in Welltower (WELL)'s ATM program?
Welltower's July 2026 equity distribution agreement permits offers and sales of up to $7.5 billion in aggregate. Remaining ATM Program capacity was $4,859.303 million as of September 30, 2026; Welltower sold 1,622,950 shares under the program during October 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended September 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from to
Commission file number: 1-8923
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of Incorporation) | (IRS Employer Identification No.) | ||||||||||||||||
| (Address of principal executive office) | (Zip Code) | ||||||||||||||||
| (Registrant’s telephone number, including area code) | |||||||||||||||||
| Not Applicable | |||||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | |||||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
þ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of October 23, 2026, Welltower Inc. had 733,609,863 shares of common stock outstanding.
TABLE OF CONTENTS
| PART I. FINANCIAL INFORMATION | Page | |||||||
| Item 1. Financial Statements (Unaudited) | 3 | |||||||
| Consolidated Balance Sheets | 3 | |||||||
| Consolidated Statements of Comprehensive Income | 4 | |||||||
| Consolidated Statements of Equity | 6 | |||||||
| Consolidated Statements of Cash Flows | 8 | |||||||
| Notes to Unaudited Consolidated Financial Statements | 9 | |||||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 | |||||||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 62 | |||||||
| Item 4. Controls and Procedures | 63 | |||||||
| PART II. OTHER INFORMATION | ||||||||
| Item 1. Legal Proceedings | 64 | |||||||
| Item 1A. Risk Factors | 64 | |||||||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 64 | |||||||
| Item 5. Other Information | 64 | |||||||
| Item 6. Exhibits | 65 | |||||||
| Signatures | 66 | |||||||
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEETS
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
| September 30, 2026 (Unaudited) | December 31, 2025 (Note) | |||||||||||||
Assets: | ||||||||||||||
Real estate investments: | ||||||||||||||
| Real property owned: | ||||||||||||||
| Land and land improvements | $ | $ | ||||||||||||
| Buildings and improvements | ||||||||||||||
| Acquired lease intangibles | ||||||||||||||
| Real property held for sale, net of accumulated depreciation | ||||||||||||||
| Construction in progress | ||||||||||||||
| Less accumulated depreciation and amortization | ( | ( | ||||||||||||
| Net real property owned | ||||||||||||||
| Right of use assets, net | ||||||||||||||
| Investments in sales-type leases, net | ||||||||||||||
| Real estate loans receivable, net of credit allowance | ||||||||||||||
| Net real estate investments | ||||||||||||||
Other assets: | ||||||||||||||
| Investments in unconsolidated entities | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Receivables and other assets | ||||||||||||||
| Total other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and equity | ||||||||||||||
Liabilities: | ||||||||||||||
| Unsecured credit facility and commercial paper | $ | $ | ||||||||||||
| Senior unsecured notes | ||||||||||||||
| Secured debt | ||||||||||||||
| Lease liabilities | ||||||||||||||
| Accrued expenses and other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Redeemable noncontrolling interests | ||||||||||||||
Equity: | ||||||||||||||
| Common stock | ||||||||||||||
| Capital in excess of par value | ||||||||||||||
| Treasury stock | ( | ( | ||||||||||||
| Cumulative net income | ||||||||||||||
| Cumulative dividends | ( | ( | ||||||||||||
| Accumulated other comprehensive income (loss) | ( | ( | ||||||||||||
| Total Welltower Inc. stockholders’ equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ | ||||||||||||
Note: The consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.
3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands, except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Resident fees and services | $ | $ | $ | $ | ||||||||||||||||||||||
| Rental income | ||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Property operating expenses | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | ||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | ||||||||||||||||||||||||||
| Provision for loan losses, net | ( | |||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||
| Total expenses | ||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | ||||||||||||||||||||||||||
| Income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | ( | ( | ( | ( | ||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | ||||||||||||||||||||||||||
| Income (loss) from continuing operations | ||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests(1) | ||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | $ | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders(2) | $ | $ | $ | $ | ||||||||||||||||||||||
| Dividends declared and paid per common share | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests.
(2) Includes adjustment to the numerator for income (loss) attributable to OP Units and DownREIT Units.
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||
| Foreign currency translation gain (loss) | ( | ( | ||||||||||||||||||||||||
| Derivative and financial instruments designated as hedges gain (loss) | ( | |||||||||||||||||||||||||
| Total other comprehensive income (loss) | ( | ( | ||||||||||||||||||||||||
| Total comprehensive income (loss) | ||||||||||||||||||||||||||
Less: Total comprehensive income (loss) attributable to noncontrolling interests(1) | ||||||||||||||||||||||||||
| Total comprehensive income (loss) attributable to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests. | ||||||||||||||||||||||||||
5
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital in Excess of Par Value | Treasury Stock | Cumulative Net Income | Cumulative Dividends | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||
Balances at January 1, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units and DownREIT Units | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity component of exchangeable debt | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity component of exchangeable debt | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
6
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
Nine Months Ended September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Capital in Excess of Par Value | Treasury Stock | Cumulative Net Income | Cumulative Dividends | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||
Balances at January 1, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units and DownREIT Units | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units and DownREIT Units | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net change in noncontrolling interests | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustment to members’ interest from change in ownership in Welltower OP | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Redemption of OP Units and DownREIT Units | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts related to stock incentive plans, net of forfeitures | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net proceeds from issuance of common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
7
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
WELLTOWER INC. AND SUBSIDIARIES
(In thousands)
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Operating activities: | ||||||||||||||
| Net income (loss) | $ | $ | ||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided from (used in) operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Other amortization expenses | ||||||||||||||
| Provision for loan losses, net | ( | |||||||||||||
Impairment of assets | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Loss (gain) on derivatives and financial instruments, net | ||||||||||||||
Loss (gain) on extinguishment of debt, net | ||||||||||||||
Loss (income) from unconsolidated entities | ||||||||||||||
Rental income less than (in excess of) cash received | ( | ( | ||||||||||||
Amortization related to above (below) market leases, net | ( | ( | ||||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | ( | ( | ||||||||||||
Distributions by unconsolidated entities | ||||||||||||||
Increase (decrease) in accrued expenses and other liabilities | ( | |||||||||||||
Decrease (increase) in receivables and other assets | ( | ( | ||||||||||||
| Net cash provided from (used in) operating activities | ||||||||||||||
| Investing activities: | ||||||||||||||
Cash disbursed for acquisitions, net of cash acquired | ( | ( | ||||||||||||
Cash disbursed for capital improvements to existing properties | ( | ( | ||||||||||||
Cash disbursed for construction in progress | ( | ( | ||||||||||||
Capitalized interest | ( | ( | ||||||||||||
Investment in loans receivable | ( | ( | ||||||||||||
Principal collected on loans receivable | ||||||||||||||
Other investments, net of payments | ( | ( | ||||||||||||
Contributions to unconsolidated entities | ( | ( | ||||||||||||
Distributions by unconsolidated entities | ||||||||||||||
| Net proceeds from net investment hedge settlements | ( | |||||||||||||
Proceeds from sales of real property | ||||||||||||||
| Net cash provided from (used in) investing activities | ( | ( | ||||||||||||
| Financing activities: | ||||||||||||||
Net increase (decrease) under unsecured credit facility and commercial paper | ||||||||||||||
| Net proceeds from issuance of senior unsecured notes | ||||||||||||||
| Payments to extinguish, exchange or redeem senior unsecured notes | ( | ( | ||||||||||||
Net proceeds from the issuance of secured debt | ||||||||||||||
Payments on secured debt | ( | ( | ||||||||||||
Net proceeds from the issuance of common stock | ||||||||||||||
Payments for deferred financing costs and prepayment penalties | ( | ( | ||||||||||||
Contributions by noncontrolling interests(1) | ||||||||||||||
Distributions to noncontrolling interests(1) | ( | ( | ||||||||||||
Cash distributions to stockholders | ( | ( | ||||||||||||
Other financing activities | ( | ( | ||||||||||||
| Net cash provided from (used in) financing activities | ||||||||||||||
| Effect of foreign currency translation on cash and cash equivalents and restricted cash | ( | |||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
| Supplemental cash flow information: | ||||||||||||||
| Interest paid | $ | $ | ||||||||||||
| Income taxes paid (received), net | ||||||||||||||
(1) Includes amounts attributable to redeemable noncontrolling interests. | ||||||||||||||
8
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Business
Welltower Inc. (NYSE: WELL), a real estate investment trust (“REIT”) and S&P 500 company, is positioned at the center of the silver economy, focusing on rental housing for aging seniors across the United States, United Kingdom and Canada. Our portfolio predominantly consists of seniors and wellness housing communities at the intersection of housing and hospitality, creating vibrant communities for mature renters and older adults.
We are structured as an umbrella partnership REIT under which substantially all of our business is conducted through Welltower OP LLC, the day-to-day management of which is exclusively controlled by Welltower Inc. Unless stated otherwise or the context otherwise requires, references to “Welltower” or the “Company” mean Welltower Inc. and references to “Welltower OP” mean Welltower OP LLC. References to “we,” “us” and “our” mean collectively Welltower, Welltower OP and those entities/subsidiaries owned or controlled by Welltower and/or Welltower OP. Welltower’s weighted average ownership in Welltower OP was 98.174 % for the nine months ended September 30, 2026. As of September 30, 2026, Welltower owned 98.168 % of the issued and outstanding units of Welltower OP, with other investors owning the remaining 1.832 % of outstanding units. We adjust the noncontrolling members’ interest at the end of each period to reflect their interest in the net assets of Welltower OP.
2. Accounting Policies and Related Matters
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2026 are not necessarily an indication of the results that may be expected for the year ending December 31, 2026. Unless otherwise indicated, references to “$” are to U.S. dollars and references to “C$” are to Canadian dollars. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.
New Accounting Standards
In 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU is intended to enhance transparency of income statement disclosures primarily through additional disaggregation of relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with prospective or retrospective application permitted. We are currently evaluating the potential impact of adopting this new standard on our consolidated financial statements and disclosures.
3. Real Property Acquisitions and Development
The total purchase price for all properties acquired through asset acquisitions is allocated to the tangible and identifiable intangible assets and liabilities at cost on a relative fair value basis. Liabilities assumed and any associated noncontrolling interests are reflected at fair value. For properties acquired through business combinations, assets acquired, liabilities assumed and any associated noncontrolling interests are recorded at fair value, with any excess consideration accounted for as goodwill. Acquired lease intangibles primarily relate to assets in our Seniors Housing Operating portfolio and generally have amortization periods of one to two years .
Transaction costs primarily represent costs incurred with acquisitions, including due diligence costs, fees for legal and valuation services, termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. Transaction costs directly related to asset acquisitions are capitalized as a component of purchase price and all other non-capitalizable costs are reflected in other expenses on our Consolidated Statements of Comprehensive Income. Transaction costs related to business combinations are expensed as incurred.
Our acquisitions of properties are at times subject to earn out provisions based on the future operating performance of the acquired properties which could result in incremental payments in the future. Our policy is to recognize such contingent consideration with respect to asset acquisitions when the contingency is resolved and the consideration becomes payable. Contingent consideration with respect to business combinations is included in purchase consideration based on the initial estimated fair value. These amounts are included within the total net real estate assets and total liabilities sections of the table below.
The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments.
9
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our real property investment activity by segment for the periods presented (in thousands):
| Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating | Triple-net | Outpatient Medical | Totals | Seniors Housing Operating | Triple-net | Outpatient Medical | Totals | ||||||||||||||||||||||||||||||||||||||||
| Land and land improvements | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Buildings and improvements | |||||||||||||||||||||||||||||||||||||||||||||||
| Acquired lease intangibles | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction in progress | |||||||||||||||||||||||||||||||||||||||||||||||
| Real property held for sale | |||||||||||||||||||||||||||||||||||||||||||||||
| Right of use assets, net | |||||||||||||||||||||||||||||||||||||||||||||||
| Total net real estate assets | |||||||||||||||||||||||||||||||||||||||||||||||
| Receivables and other assets | |||||||||||||||||||||||||||||||||||||||||||||||
Total assets acquired(1) | |||||||||||||||||||||||||||||||||||||||||||||||
| Secured debt | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Lease liabilities | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Total liabilities acquired | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Non-cash acquisition related activity(2) | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Cash disbursed for acquisitions | |||||||||||||||||||||||||||||||||||||||||||||||
| Construction in progress additions | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Capitalized interest | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Accruals(3) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Cash disbursed for construction in progress | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Capital improvements to existing properties | |||||||||||||||||||||||||||||||||||||||||||||||
| Total cash invested in real property, net of cash acquired | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
(1) Excludes $7,379,000 and $5,239,000 of unrestricted and restricted cash acquired during the nine months ended September 30, 2026 and 2025, respectively.
(2) For the nine months ended September 30, 2026, relates to the acquisition of assets previously recognized as investments in unconsolidated entities, the reclassification of two properties from sales-type lease to operating lease (see Note 6 for further details), deferred consideration and exchangeable units issued in conjunction with the Amica Senior Lifestyles acquisition (see below), the issuance of OP units, and the settlement of an existing real estate loan receivable. For the nine months ended September 30, 2025, relates to the acquisition of assets previously recognized as investments in unconsolidated entities, the re-issuance of Welltower Inc. treasury shares, the issuance of Welltower Inc. Class A stock, acquired assets classified as held for sale and sold contemporaneously with the acquisition, and deferred consideration in lieu of cash consideration.
(3) Represents non-cash accruals for amounts to be paid in future periods for properties that converted, offset by amounts paid in the current period.
Amica Senior Lifestyles Acquisition
On April 1, 2026, we acquired a Canadian portfolio of 34 seniors housing communities and interests in four unconsolidated properties for a total purchase price of $2,951,181,000 . The portfolio was funded with cash on hand, the assumption of $408,623,000 of secured debt and $27,589,000 of exchangeable partnership units that can be converted into Welltower common shares. The portfolio is included in our Seniors Housing Operating segment and is operated by Amica Senior Lifestyles (“Amica”). On July 2, 2026, we closed on the acquisition of four properties and an interest in one unconsolidated property, all of which are currently under development, for a purchase price of $433 million. The transactions were accounted for as asset acquisitions.
Barchester Healthcare Acquisition
During October 2025, in a series of transactions, we acquired all of the shares of Mint UK Bidco LLC (“Barchester”). The acquired portfolio consists of 111 properties in the U.K. held in a RIDEA structure managed by Barchester Healthcare and reported in our Seniors Housing Operating segment, 150 properties subject to a triple-net lease with Barchester Healthcare and reported in our Triple-net segment, and 21 properties under development which will also be managed by Barchester Healthcare in a RIDEA structure following development completion. Total consideration for the transaction, net of cash acquired, was $6,851,721,000 , which included non-cash consideration of $1,544,747,000 primarily related to OP Units delivered in exchange for the contribution of the shares of the acquired entity.
The transaction was accounted for as a business combination. We finalized the valuation of the assets acquired and liabilities assumed as of September 30, 2026. During the nine months ended September 30, 2026, we recorded immaterial measurement
10
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
period adjustments primarily related to our review of tangible and intangible assets acquired and their related tax basis, and the finalization of our review of certain net working capital assets acquired and liabilities assumed. Please refer to Note 3 of the notes to the consolidated financial statements within our 2025 Annual Report on Form 10-K for additional information related to the Barchester acquisition.
Operations related to the transaction are included in our results of operations from the date of acquisition. We recognized $740,384,000 of total revenue from such operations during the nine months ended September 30, 2026.
HC-One Group Acquisition
On October 24, 2025, we acquired all of the shares of HC-One Topco Limited (“HC-One”) via a share purchase agreement. HC-One operated 282 seniors housing properties in the U.K. including owned properties and leasehold interests. The acquired properties are reported within our Seniors Housing Operating segment. Since the transaction closed, we have transitioned management of 89 properties to other operators. Total consideration for the transaction, net of cash acquired, was $1,646,860,000 , which included $908,605,000 related to the settlement of existing contractual arrangements between us and HC-One and was primarily attributable to the settlement of our existing real estate loan receivable of $882,326,000 , as well as the settlement of equity warrants and an equity interest previously held by us and resulted in reduced cash consideration.
The transaction was accounted for as a business combination. We finalized the valuation of the assets acquired and liabilities assumed as of September 30, 2026. During the nine months ended September 30, 2026, we recorded immaterial measurement period adjustments, which were primarily related to the finalization of our review of certain net working capital assets acquired and liabilities assumed. Please refer to Note 3 of the notes to the consolidated financial statements within our 2025 Annual Report on Form 10-K for additional information related to the HC-One acquisition.
Operations related to the transaction are included in our results of operations from the date of acquisition. We recognized $899,856,000 of total revenue from such operations during the nine months ended September 30, 2026.
Pro Forma Financial Information
The following unaudited pro forma financial information presents consolidated financial information as if the Barchester and HC-One transactions occurred on January 1, 2025. In the opinion of management, all significant necessary adjustments to reflect the effect of the transactions have been made. The following pro forma information is not indicative of future operations (in thousands):
| Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Pro forma revenues | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Pro forma net income attributable to common stockholders | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Per share data (diluted) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to common stockholders (as reported) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to common stockholders (pro forma) | $ | |||||||||||||||||||||||||||||||||||||||||||||||||
Pro forma net income attributable to common stockholders and net income attributable to common stockholders per diluted share are impacted by the acquired lease intangibles that have a weighted average amortization period of two years .
Triple-net Acquisitions
Throughout 2025, we acquired 130 skilled nursing facilities for a total purchase price of $2,465,527,000 , which included $1,946,395,000 of cash consideration and $519,132,000 of common stock consideration. The acquired properties were leased either to Avir Health Group or Aviata Health Group under long-term triple-net leases. During the nine months ended September 30, 2026, we acquired an additional 78 skilled nursing facilities for total cash consideration of $1,764,671,000 . The acquired properties were leased to Avir Health Group under long-term triple-net leases.
Subsequent Acquisition Activity
In October 2026, we announced that we have closed or expect to close approximately $7 billion of seniors housing acquisitions through the end of the year. These acquisitions include a Canadian portfolio of 27 properties for a purchase price of C$2.2 billion, which closed on October 1, 2026. The acquisition, which will be reported in our Seniors Housing Operating segment, was funded through the assumption of C$639 million of secured debt, with the remainder funded with cash on hand. In addition, included in our announced investment activity is a 62 property portfolio in the United States that we are under contract to acquire for approximately $2.6 billion. The transaction is expected to be funded with cash and OP unit issuances in the fourth quarter. The portfolio will be leased to a tenant under a long term triple-net master lease. Expected acquisitions not yet closed are subject to customary closing conditions and regulatory approvals.
11
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Development Projects Placed Into Service
The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented (in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||
Development projects: | ||||||||||||||
Seniors Housing Operating | $ | $ | ||||||||||||
Outpatient Medical | ||||||||||||||
| Total construction in progress conversions | $ | $ | ||||||||||||
4. Intangible Assets and Goodwill
The following is a summary of our real estate intangibles, excluding those related to ground leases or classified as held for sale, as of the dates indicated (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Assets: | ||||||||||||||
| Gross acquired lease intangibles | $ | $ | ||||||||||||
| Accumulated amortization | ( | ( | ||||||||||||
| Net book value | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||
| Below market tenant leases | $ | $ | ||||||||||||
| Accumulated amortization | ( | ( | ||||||||||||
| Net book value | $ | $ | ||||||||||||
The following is a summary of real estate intangible amortization income (expense) for the periods presented (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||
| Rental income related to (above)/below market tenant leases, net | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Amortization related to in-place lease intangibles | ( | ( | ( | ( | ||||||||||||||||||||||
Goodwill
The change in the carrying amount of goodwill by reportable segment is as follows (in thousands):
| Seniors Housing Operating | Outpatient Medical | Total | ||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | |||||||||||||||||
| Acquisition measurement period adjustments | $ | ( | $ | $ | ( | |||||||||||||||
| Effect of foreign currency translation | ( | ( | ||||||||||||||||||
Balance at September 30, 2026 | $ | $ | $ | |||||||||||||||||
5. Dispositions, Real Property Held for Sale and Impairment
We periodically sell properties for various reasons, including favorable market conditions, the exercise of tenant purchase options or reduction of concentrations (e.g., property type, relationship or geography). We classify a real estate property as held for sale when (i) the disposal has been approved by those within the organization with the appropriate level of authority, (ii) the property is available for sale in its present condition, (iii) an active program to locate a buyer has been initiated, (iv) it is probable that the property will be disposed of within one year, (v) the property is being marketed at a reasonable price relative to its fair value and (vi) it is unlikely that the disposal plan will significantly change or be withdrawn. As part of this process, we also consider whether these disposal transactions constitute a strategic shift that has a major effect on our operations and financial results and represent a discontinued operation.
12
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 2026, 22 Seniors Housing Operating properties, 32 Triple-net properties and four Outpatient Medical properties, with an aggregate real estate balance of $306,776,000 , were classified as held for sale. Expected gross sales proceeds from these held for sale properties total approximately $717,392,000 .
The net book value of real property owned is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that a property may be impaired. If the estimated undiscounted cash flows indicate that the carrying value of the property will not be recoverable, the carrying value of the property is reduced to the estimated fair market value and an impairment charge is recognized. Properties that meet the held for sale criteria are recorded at the lesser of fair value less costs to sell or the carrying value. During the nine months ended September 30, 2026, we recorded impairment charges of $64,052,000 related to 17 Seniors Housing Operating properties, two Triple-net properties and six Outpatient Medical properties. During the nine months ended September 30, 2025, we recorded $75,359,000 of impairment charges related to nine Seniors Housing Operating properties and six Triple-net properties.
Operating results attributable to properties sold or classified as held for sale which do not meet the definition of discontinued operations are not reclassified on our Consolidated Statements of Comprehensive Income. We recognized income (loss) from continuing operations before income taxes and other items from properties sold or classified as held for sale as of September 30, 2026 of $(20,156,000 ) and $16,236,000 for the three and nine months ended September 30, 2026 and $92,534,000 and $213,786,000 for the same respective periods in 2025.
Outpatient Medical Portfolio Disposition
On August 14, 2025, we entered into a definitive agreement to sell a portfolio of 319 consolidated and unconsolidated Outpatient Medical properties for approximately $7.2 billion. Net proceeds are expected to total approximately $6.0 billion following the reinvestment of a portion of the gross proceeds into a mandatorily redeemable preferred interest investment recorded as a real estate loan receivable at fair value, accompanied by a profits interest. The disposition has and will continue to occur in tranches, and some properties are subject to rights of first refusal held by joint venture partners or ground lessors, which could result in separate sale transactions without a mandatorily redeemable preferred equity investment or an accompanying profits interest. The properties met the criteria to be classified as held for sale as of September 30, 2025 and we expect to recognize a gain on the sale of the total portfolio. We assessed this transaction and concluded that the disposal of Outpatient Medical properties does not constitute a strategic shift that has a major effect on our operations and financial results.
During the nine months ended September 30, 2026, we disposed of 74 properties related to the definitive agreement, with an aggregate gain on real estate dispositions of $591,031,000 . Total sales price related to these properties was $1,812,300,000 , which included non-cash consideration of $156,138,000 representing the initial fair value of the mandatorily redeemable preferred interest investment retained. Through September 30, 2026, we have disposed of 315 properties related to the definitive agreement.
The following is a summary of our real property disposition activity for the periods presented (in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||
Real estate dispositions:(1) | ||||||||||||||
| Seniors Housing Operating | $ | $ | ||||||||||||
Triple-net(2) | ||||||||||||||
| Outpatient Medical | ||||||||||||||
| Total dispositions | ||||||||||||||
Gain (loss) on real estate dispositions and acquisitions of controlling interests, net(3) | ||||||||||||||
| Net other assets/(liabilities) disposed | ||||||||||||||
Non-cash consideration(4) | ( | ( | ||||||||||||
| Cash proceeds from real estate dispositions | $ | $ | ||||||||||||
(1) The nine months ended September 30, 2026 includes the disposition of three unconsolidated equity method investments that collectively owned 22 Outpatient Medical properties. The nine months ended September 30, 2025 includes the disposition of unconsolidated equity method investments related to our Chartwell joint ventures. See disclosure below for further information.
(2) The nine months ended September 30, 2026 include $444,773,000 related to 28 properties classified as sales-type leases as of December 31, 2025 for which the underlying properties were sold and the sales-type leases terminated. The nine months ended September 30, 2025 include $172,260,000 related to four properties classified as sales-type leases as of December 31, 2024 for which the underlying properties were sold and the sales-type leases terminated.
(3) The nine months ended September 30, 2026 exclude the net loss recognized in conjunction with the initial consolidation of variable interest entities and include a $3,059,000 loss for 28 properties classified as sales-type leases as of December 31, 2025 which were sold in 2026. The nine months ended September 30, 2025 include a $2,523,000 gain recognized for four properties classified as sales-type leases as of December 31, 2024 which were sold in 2025.
13
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Strategic Dissolution of Chartwell Joint Ventures
During the quarter ended March 31, 2025, we substantially dissolved our existing relationship with Chartwell in Canada in a transaction covering 39 previously unconsolidated Seniors Housing Operating properties. The transaction included the acquisition of Chartwell’s interest in 23 properties and the sale of our interest in 16 properties to Chartwell.
We recorded net real estate investments of $474,384,000 related to the 23 acquired and now consolidated properties, which was comprised of $77,385,000 of cash consideration and $396,999,000 of non-cash consideration. Non-cash consideration primarily includes $223,495,000 of assumed mortgage debt secured by the acquired properties, $78,538,000 of carryover investment from our prior equity method ownership interest, $85,435,000 of fair value interests in the 16 properties transferred by us to Chartwell and $9,531,000 of other net liabilities acquired. We also derecognized $41,064,000 of equity method investments related to the 16 properties retained by Chartwell and recorded a gain of $53,354,000 within gain (loss) on real estate dispositions and acquisitions of controlling interests, net within our Consolidated Statements of Comprehensive Income.
In conjunction with the transaction, operations for the 23 now wholly owned properties, along with operations for two other existing wholly-owned properties, transitioned to Cogir Senior Living (“Cogir”).
6. Leases
Lessee
We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option to extend the term from one to 25 years or more. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities.
The components of lease expense were as follows for the periods presented (in thousands):
| Nine Months Ended | ||||||||||||||||||||
| Classification | September 30, 2026 | September 30, 2025 | ||||||||||||||||||
Operating lease cost:(1) | ||||||||||||||||||||
| Real estate lease expense | Property operating expenses | $ | $ | |||||||||||||||||
| Non-real estate investment lease expense | General and administrative expenses | |||||||||||||||||||
| Financing lease cost: | ||||||||||||||||||||
| Amortization of leased assets | Property operating expenses | |||||||||||||||||||
| Interest on lease liabilities | Interest expense | |||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||
(1) Includes short-term leases which are immaterial.
Supplemental balance sheet information related to leases in which we are the lessee is as follows (in thousands):
| Classification | September 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Right of use assets: | ||||||||||||||||||||
| Operating leases - real estate | Right of use assets, net | $ | $ | |||||||||||||||||
| Financing leases - real estate | Right of use assets, net | |||||||||||||||||||
| Real estate right of use assets, net | ||||||||||||||||||||
| Operating leases - non-real estate investments | Receivables and other assets | |||||||||||||||||||
| Total right of use assets, net | $ | $ | ||||||||||||||||||
| Lease liabilities: | ||||||||||||||||||||
| Operating leases | $ | $ | ||||||||||||||||||
| Financing leases | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||
14
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Lessor
Operating Leases
Substantially all of our operating leases in which we are the lessor contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period.
Leases in our Triple-net and Outpatient Medical portfolios recognized under ASC 842, typically include some form of operating expense reimbursement by the tenant. For the nine months ended September 30, 2026, we recognized $1,402,223,000 of rental income related to operating leases, of which $40,539,000 was for variable lease payments that primarily represent the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. For the nine months ended September 30, 2025, we recognized $1,444,082,000 of rental income related to operating leases, of which $167,865,000 was for variable lease payments.
For the majority of our Seniors Housing Operating segment, revenue from resident fees and services is predominantly service-based, and as such, resident agreements are accounted for under ASC 606. Within that reportable segment, we also recognize revenue from residential wellness housing leases in accordance with ASC 842. The amount of revenue related to these leases was $721,234,000 and $589,289,000 for the nine months ended September 30, 2026 and 2025, respectively.
Sales-Type Leases
At December 31, 2025, 30 properties leased to Integra Healthcare Properties (“Integra”) under a long-term master lease were classified as sales-type leases due to the expected exercise by the respective subtenants of purchase options related to these properties.
During the nine months ended September 30, 2026, an additional 11 properties leased to Integra were reclassified from operating to sales-type leases. In conjunction with this reclassification, a loss of $24,845,000 was recognized in gain (loss) on real estate dispositions and acquisitions of controlling interests, net in the Consolidated Statements of Comprehensive Income. Additionally, we completed the sale of 39 properties for net proceeds of $575,691,000 , which was recognized in proceeds from sales of real property in the Consolidated Statements of Cash Flows, and reclassified two properties from sales-type lease back to operating lease as a result of the exercise of the purchase option by the subtenant no longer being reasonably assured.
At December 31, 2024, four properties were classified as sales-type leases. During the three months ended March 31, 2025, these properties were sold and we recognized net proceeds of $174,824,000 , which was included in proceeds from sales of real property in the Consolidated Statements of Cash Flows.
7. Loans Receivable
Loans receivable are recorded on our Consolidated Balance Sheets in real estate loans receivable, net of credit allowance, or for non-real estate loans receivable, in receivables and other assets. Real estate loans receivable consists of mortgage loans and other real estate loans, which are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment or pledge of the partnership interest in, the related properties, as well as corporate guarantees and/or personal guarantees. Non-real estate loans are generally corporate loans with no real estate backing. Interest income on loans is recognized as earned based on the principal amount outstanding, subject to an evaluation of the risk of credit loss. Accrued interest receivable was $40,431,000 and $23,497,000 as of September 30, 2026 and December 31, 2025, respectively, and is included in receivables and other assets on the Consolidated Balance Sheets.
The following is a summary of our loans receivable as of the dates indicated (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Mortgage loans | $ | $ | ||||||||||||
| Other real estate loans | ||||||||||||||
| Allowance for credit losses on real estate loans receivable | ( | ( | ||||||||||||
| Real estate loans receivable, net of credit allowance | ||||||||||||||
| Non-real estate loans | ||||||||||||||
| Allowance for credit losses on non-real estate loans receivable | ( | ( | ||||||||||||
| Non-real estate loans receivable, net of credit allowance | ||||||||||||||
| Total loans receivable, net of credit allowance | $ | $ | ||||||||||||
15
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our loan activity for the periods presented (in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||
| Advances on loans receivable | $ | $ | ||||||||||||
| Less: Receipts on loans receivable | ||||||||||||||
| Net cash advances (receipts) on loans receivable | $ | $ | ||||||||||||
In March 2026, we provided two mortgage loans collateralized by a first mortgage lien in the aggregate principal amount of $895,000,000 , each collateralized by a portfolio of skilled nursing facilities. The loans bear interest at 8 % per annum.
The allowance for credit losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the credit allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of credit quality indicators, including, but not limited to, payment status, historical loan charge-offs, financial strength of the borrower and guarantors and nature, extent and value of the underlying collateral.
A loan is considered to have deteriorated credit quality when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the loan agreement. For those loans we identified as having deteriorated credit quality, we determine the amount of credit loss on an individual basis. Placement on non-accrual status may be required. Consistent with this definition, all loans on non-accrual status are deemed to have deteriorated credit quality. To the extent circumstances improve and the risk of collectability is diminished, we may return these loans to income accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.
For the remaining loans, we generally assess credit loss on a collective pool basis and use our historical loss experience for similar loans and expectations of future performance of the borrowers to determine the reserve for credit losses. The following is a summary of our loans by credit loss category (in thousands):
| September 30, 2026 | ||||||||||||||||||||||||||||||||
| Loan category | Years of Origination | Loan Carrying Value | Allowance for Credit Loss | Net Loan Balance | No. of Loans | |||||||||||||||||||||||||||
Deteriorated loans(1) | 2007 - 2019 | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Collective loan pool | 2010 - 2021 | ( | ||||||||||||||||||||||||||||||
| Collective loan pool | 2022 | ( | ||||||||||||||||||||||||||||||
| Collective loan pool | 2023 | ( | ||||||||||||||||||||||||||||||
| Collective loan pool | 2024 | ( | ||||||||||||||||||||||||||||||
| Collective loan pool | 2025 | ( | ||||||||||||||||||||||||||||||
| Collective loan pool | 2026 | ( | ||||||||||||||||||||||||||||||
| Total loans | $ | $ | ( | $ | ||||||||||||||||||||||||||||
(1) Interest recognized on loans classified as deteriorated loans as of the end of the respective reporting period was $4,045,000 and $11,652,000 for the three and nine months ended September 30, 2026, respectively.
During the year ended December 31, 2025, we reclassified the entirety of the secured notes receivable from Genesis to the deteriorated loan category following Genesis’s initiation of Chapter 11 bankruptcy proceedings. The carrying value of the outstanding notes as of September 30, 2026 is $129,164,000 . The notes receivable were evaluated on an individual basis to determine the appropriateness of the allowance for credit losses, which included an estimate of collectability, collateral valuation and the anticipated recovery through the bankruptcy process. In October 2026, repayment was received in an amount that approximated carrying value.
The total allowance for credit losses balance is deemed sufficient to absorb expected losses relating to our loan portfolio. The following is a summary of the activity within the allowance for credit losses on loans receivable for the periods presented (in thousands):
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Balance at beginning of period | $ | $ | |||||||||
| Provision for loan losses, net | ( | ||||||||||
| Loan write-offs, net of recoveries | ( | ||||||||||
| Effect of foreign currency | ( | ||||||||||
| Balance at end of period | $ | $ | |||||||||
16
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
8. Investments in Unconsolidated Entities
We participate in a number of joint ventures, which generally invest in seniors housing and healthcare real estate. Our share of the results of operations for these properties has been included in our consolidated results of operations from the date of acquisition by the joint ventures and is reflected in our Consolidated Statements of Comprehensive Income as income or loss from unconsolidated entities. The following is a summary of our investments in unconsolidated entities (dollars in thousands):
Percentage Ownership (1) | September 30, 2026 | December 31, 2025 | ||||||||||||||||||
| Seniors Housing Operating | $ | $ | ||||||||||||||||||
| Triple-net | ||||||||||||||||||||
| Outpatient Medical | ||||||||||||||||||||
| Non-segment/Corporate | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||
(1) As of September 30, 2026 and includes ownership of investments classified as liabilities and excludes ownership of in substance real estate.
We own interests in certain entities that provide comprehensive property management services with respect to certain of our Seniors Housing Operating properties. We pay management fees to these entities based on management agreements, plus if applicable, positive or negative adjustments based on specified performance targets. We incurred fees of $30,941,000 and $86,274,000 for the three and nine months ended September 30, 2026, and $21,972,000 and $63,820,000 for the same periods in 2025, respectively. Management fees are reflected within property operating expenses within our Consolidated Statements of Comprehensive Income.
At September 30, 2026, the aggregate unamortized basis difference of our joint venture investments of $187,957,000 is primarily attributable to the difference between the amount for which we purchased our interest in the entity, including transaction costs, and the historical carrying value of the net assets of the joint venture. This difference is being amortized over the remaining useful life of the related properties and included in the reported amount of income from unconsolidated entities.
We have made loans related to 21 properties as of September 30, 2026 for the development and construction of certain properties that have a carrying value of $765,981,000 . We believe that such borrowers typically represent variable interest entities (“VIEs”) in accordance with ASC 810, “Consolidation.” VIEs are required to be consolidated by their primary beneficiary, which is the enterprise that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. We have concluded that we are not the primary beneficiary of such borrowers, therefore, the loan arrangements were assessed based on, among other factors, the amount and timing of expected residual profits, the estimated fair value of the collateral and the significance of the borrower’s equity in the project. Based on these assessments, the arrangements have been classified as in substance real estate investments. We are obligated to fund an additional $36,284,000 related to these investments.
In January 2025, we announced the formation of a private funds management business in conjunction with the launch of the Seniors Housing Fund I LP (the “Fund”). The Fund was formed with the intent to invest in U.S. seniors housing properties that are either stable or with a near-term path to stabilization. Welltower serves as the general partner and asset manager and has a limited partner interest in the Fund, which is unconsolidated due to certain rights held by third-party limited partners. Our unconsolidated investment balance in the Fund was $359,978,000 and $185,482,000 as of September 30, 2026 and December 31, 2025, respectively. The Fund investment and related income from operations is classified within our Seniors Housing Operating segment.
17
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
9. Credit Concentration
We use consolidated net operating income (“NOI”) as our credit concentration metric. See Note 18 for additional information and reconciliation. The following table summarizes certain information about our credit concentration for the nine months ended September 30, 2026, excluding our share of NOI in unconsolidated entities (dollars in thousands):
Concentration by relationship:(1) | Number of Properties | Total NOI | Percent of NOI(2) | |||||||||||||||||
| Barchester | $ | |||||||||||||||||||
| Cogir Senior Living | ||||||||||||||||||||
| Avir Health Group | ||||||||||||||||||||
| Care UK | ||||||||||||||||||||
| Oakmont Management Group | ||||||||||||||||||||
| Remaining portfolio | ||||||||||||||||||||
| Totals | $ | |||||||||||||||||||
(1) Cogir, Care UK and Oakmont Management Group are in our Seniors Housing Operating segment. Avir Health Group is in our Triple-net segment. Barchester is in both our Seniors Housing Operating and Triple-net segments.
(2) NOI with our top five relationships comprised 26 % of total NOI for the year ended December 31, 2025.
10. Borrowings Under Credit Facilities and Commercial Paper Programs
At September 30, 2026, we had a primary unsecured credit facility with a consortium of 32 banks that included a $6,250,000,000 unsecured revolving credit facility. The unsecured revolving credit facility is comprised of a $2,000,000,000 tranche that matures on July 24, 2029 (none outstanding at September 30, 2026) and a $4,250,000,000 tranche that matures on March 6, 2030 (none outstanding at September 30, 2026). The unsecured revolving credit facility may be increased, subject to certain conditions and lender commitments, by up to an additional $1,250,000,000 . The $4,250,000,000 tranche may be extended, at our option, for two successive six-month periods. The primary unsecured credit facility also allows us to borrow up to $1,750,000,000 in alternative currencies (none outstanding at September 30, 2026). Borrowings under the unsecured revolving credit facility are subject to interest payable at the applicable margin over the secured overnight financing rate (“SOFR”) interest rate. Based on our current credit ratings and annual sustainability results, the applicable margin under the unsecured revolving credit facility was 0.675 % over SOFR at September 30, 2026. In addition, we pay a facility fee quarterly to each bank based on the bank’s commitment amount. This fee depends on our debt ratings and annual sustainability results and was 0.125 % at September 30, 2026.
Under the terms of our U.S. dollar denominated commercial paper program, we may issue unsecured commercial paper notes with maturities that vary, but do not exceed 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $3,000,000,000 . As of September 30, 2026, $760,000,000 of principal was outstanding under the program, reducing the available borrowing capacity under the unsecured revolving credit facility. At September 30, 2026, the notes outstanding under the program had a weighted-average interest rate of 4.13 % and a weighted average remaining maturity of one day.
18
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following information relates to aggregate principal activity and utilization under our unsecured revolving credit facility and commercial paper programs for the periods presented (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Gross borrowings | ||||||||||||||||||||||||||
| Gross repayments | ( | ( | ( | |||||||||||||||||||||||
| Effect of foreign currency | ( | ( | ||||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
| Maximum amount outstanding at any month end | $ | $ | $ | $ | ||||||||||||||||||||||
| Average amount outstanding (total of daily principal balances divided by days in period) | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average interest rate (actual interest expense divided by average borrowings outstanding) | % | % | % | % | ||||||||||||||||||||||
11. Senior Unsecured Notes and Secured Debt
At September 30, 2026, the annual principal payments due on our debt obligations were as follows (in thousands):
Senior Unsecured Notes (1,2) | Secured Debt (3) | Other Financial Obligations (4) | Totals | |||||||||||||||||||||||
| 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
2027(5,6) | ||||||||||||||||||||||||||
2028(7) | ||||||||||||||||||||||||||
| 2029 | ||||||||||||||||||||||||||
| 2030 | ||||||||||||||||||||||||||
Thereafter(8,9,10) | ||||||||||||||||||||||||||
| Total principal balance | ||||||||||||||||||||||||||
| Unamortized discounts and premiums, net | ( | ( | ||||||||||||||||||||||||
| Unamortized debt issuance costs, net | ( | ( | ( | |||||||||||||||||||||||
| Fair value adjustments and other, net | ( | ( | ( | |||||||||||||||||||||||
| Total carrying value of debt | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Annual interest rates range from 2.05 % to 6.50 %. The ending weighted average interest rate, after considering the effects of interest rate swaps, was 3.98 % and 3.96 % as of September 30, 2026 and September 30, 2025, respectively.
(2) Senior unsecured notes are generally issued by Welltower OP and are fully and unconditionally guaranteed by Welltower. The C$300,000,000 of 2.95 % senior unsecured notes due 2027 have been issued through private placement by a wholly owned subsidiary of Welltower OP and are fully and unconditionally guaranteed by Welltower OP.
(3) Annual interest rates range from 1.74 % to 5.98 %. The ending weighted average interest rate, after considering the effects of interest rate swaps, was 4.10 % and 4.09 % as of September 30, 2026 and September 30, 2025, respectively. Gross real property value of the properties securing the debt totaled $6,576,886,000 at September 30, 2026.
(4) Represents financing obligations related to sale-leaseback transactions acquired that did not qualify for sale accounting which include an aggregate effective interest rate of 5.53 %.
(5) Includes C$2,747,615,000 of unsecured term loans (approximately $1,933,496,000 based on the Canadian/U.S. Dollar exchange rate on September 30, 2026). The term loans mature on April 9, 2027 and bear interest at adjusted Canadian Overnight Repo Rate Average plus 0.65 % (2.93 % at September 30, 2026).
(6) Includes C$300,000,000 of 2.95 % senior unsecured notes due 2027 (approximately $211,110,000 based on the Canadian/U.S. Dollar exchange rate in effect on September 30, 2026).
(7) Includes £550,000,000 of 4.80 % senior unsecured notes due 2028 (approximately $729,630,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on September 30, 2026).
(8) Includes £500,000,000 of 4.50 % senior unsecured notes due 2034 (approximately $663,300,000 based on the Pounds Sterling/U.S. Dollar exchange rate in effect on September 30, 2026).
(9) Includes C$750,000,000 of 3.85 % senior unsecured notes due 2031 (approximately $527,775,000 based on the Canadian/U.S. Dollar exchange rate in effect on September 30, 2026).
19
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of our senior unsecured notes principal activity during the periods presented (dollars in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Debt issued | ||||||||||||||
| Debt extinguished | ( | ( | ||||||||||||
| Debt exchanged or redeemed | ( | |||||||||||||
| Effect of foreign currency | ( | |||||||||||||
| Ending balance | $ | $ | ||||||||||||
On June 30, 2026, we amended our C$2,747,615,000 unsecured term loans to extend the maturity date from October 9, 2026 to April 9, 2027 and reduce the applicable margin by five basis points.
Welltower, the parent entity that consolidates Welltower OP and all other subsidiaries, fully and unconditionally guarantees to each holder of all series of senior unsecured notes issued by Welltower OP that the principal of and premium, if any, and interest on the notes will be promptly paid in full when due, whether at the applicable maturity date, by acceleration or redemption or otherwise, and interest on the overdue principal of and interest on the notes, if any, if lawful, and all other obligations of Welltower OP to the holders of the notes will be promptly paid in full or performed. Welltower’s guarantees of such notes are its senior unsecured obligation and rank equally with all of Welltower’s other future unsecured senior indebtedness and guarantees from time to time outstanding. Welltower’s guarantees of such notes are effectively subordinated to all liabilities of its subsidiaries and to its secured indebtedness to the extent of the assets securing such indebtedness. Because Welltower conducts substantially all of its business through its subsidiaries, Welltower’s ability to make required payments with respect to the guarantees depends on the financial results and condition of its subsidiaries and its ability to receive funds from its subsidiaries, whether by dividends, loans, distributions or other payments.
We may repurchase, redeem or refinance senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior unsecured notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, subject to certain contractual restrictions, at a redemption price equal to the sum of: (i) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (ii) any “make-whole” amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
Exchangeable Senior Unsecured Notes
In May 2023, Welltower OP issued $1,035,000,000 aggregate principal amount of 2.750 % exchangeable senior unsecured notes maturing May 15, 2028 (the “2028 Exchangeable Notes”) unless earlier exchanged, purchased or redeemed. In July 2024, Welltower OP issued $1,035,000,000 aggregate principal amount of 3.125 % exchangeable senior unsecured notes maturing July 15, 2029 (the “2029 Exchangeable Notes”) unless earlier exchanged, purchased or redeemed. These notes are referred to collectively as the “Exchangeable Notes.”
The following is a summary of the outstanding exchangeable features:
Number of shares of Welltower Inc. Common Stock into which $1,000 of Principal is Exchangeable(1) | Approximate Equivalent Exchange Price per Share(1) | Exchangeable Date | ||||||||||||||||||
| 2028 Exchangeable Notes | 10.5390 | $ | November 15, 2027 | |||||||||||||||||
| 2029 Exchangeable Notes | 7.8354 | $ | January 15, 2029 | |||||||||||||||||
(1) The exchange rate is subject to adjustment upon the occurrence of specified events, including in the event of the payment of a quarterly dividend in excess of a specified amount, but will not be adjusted for any accrued and unpaid interest. The amounts presented reflect the impact of the exchange rate adjustments resulting from the actual dividend rates paid.
Prior to the close of business on the business day immediately preceding the respective exchangeable dates noted in the table above, the Exchangeable Notes are exchangeable at the option of the holders only upon certain circumstances and during certain periods. On or after the respective exchangeable dates noted in the table above, the Exchangeable Notes will be exchangeable at the option of the holders at any time prior to the close of business on the second scheduled trading day
20
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
preceding the maturity date. Welltower OP will settle exchanges of the Exchangeable Notes by delivering cash up to the principal amount of the Exchangeable Notes exchanged and, in respect of the remainder of the exchanged value, if any, in excess thereof, cash or shares of Welltower’s common stock or a combination thereof, at the election of Welltower OP.
As of September 30, 2026, the Exchangeable Notes were exchangeable at the option of the holders. During the nine months ended September 30, 2026, holders of the 2028 Exchangeable Notes exchanged an aggregate principal amount of $614,749,000 , which were settled for cash consideration. No 2029 Exchangeable Notes were presented for exchange during the nine months ended September 30, 2026.
Welltower OP may redeem the 2028 Exchangeable Notes and 2029 Exchangeable Notes, at its option in whole or in part, on any business day on or after May 20, 2026 and July 20, 2027, respectively, if the last reported sales price of the common stock has been at least 130 % of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which Welltower OP provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid interest, if any, to but excluding the redemption date. As of September 30, 2026, the 2028 Exchangeable Notes were redeemable by Welltower OP.
The following is a summary of the components of the outstanding Exchangeable Notes as of September 30, 2026 and December 31, 2025 (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| 2028 Exchangeable Notes | 2029 Exchangeable Notes | 2028 Exchangeable Notes | 2029 Exchangeable Notes | ||||||||||||||||||||
| Principal | $ | $ | $ | $ | |||||||||||||||||||
| Less: unamortized debt issuance costs | |||||||||||||||||||||||
| Net carrying value included in senior unsecured notes | $ | $ | $ | $ | |||||||||||||||||||
The following is a summary of our interest expense recognized related to the Exchangeable Notes for the periods presented (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||||||
| Contractual interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Amortization of debt issuance costs | ||||||||||||||||||||||||||||||||
| Total interest expense | $ | $ | $ | $ | ||||||||||||||||||||||||||||
The following is a summary of our secured debt principal activity for the periods presented (in thousands):
| Nine Months Ended | ||||||||||||||
| September 30, 2026 | September 30, 2025 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Debt issued | ||||||||||||||
| Debt assumed | ||||||||||||||
| Debt extinguished | ( | ( | ||||||||||||
| Principal payments | ( | ( | ||||||||||||
| Effect of foreign currency | ( | |||||||||||||
| Ending balance | $ | $ | ||||||||||||
12. Derivative Instruments
We are exposed to, among other risks, the impact of changes in foreign currency exchange rates as a result of our non-U.S. investments and interest rate risk related to our capital structure. Our risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes foreign currency forward contracts, cross currency swap contracts, interest rate swaps, interest rate locks and debt issued in foreign currencies to offset a portion of these risks.
21
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Cash Flow Hedges and Fair Value Hedges of Interest Rate Risk
We enter into interest rate swaps in order to maintain a capital structure containing targeted amounts of fixed and floating-rate debt and manage interest rate risk. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our fixed-rate payments. These interest rate swap agreements are used to hedge the variable cash flows associated with variable-rate debt.
Interest rate swaps designated as fair value hedges involve the receipt of fixed amounts from a counterparty in exchange for our variable-rate payments. These interest rate swap agreements hedge the exposure to changes in the fair value of fixed-rate debt attributable to changes in the designated benchmark interest rate. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in earnings. We record the gain or loss on the hedged items in interest expense, the same line item as the offsetting loss or gain on the related interest rate swaps. In March 2022, we entered into a $550,000,000 fixed to floating swap in connection with our March 2022 senior note issuance. This swap was terminated in January 2024 resulting in a loss of $59,555,000 . As of September 30, 2026, the unamortized loss amount was $40,568,000 . In January 2024, we entered into a $550,000,000 forward-starting fixed to floating swap which converts a portion of cash flows on our $750,000,000 2.8 % senior unsecured notes to floating rate. The swap became effective in June 2025 and matures in December 2030. As of September 30, 2026, the carrying amount of the notes, exclusive of the hedge, was $745,400,000 . The fair value of the swap as of September 30, 2026 was $25,790,000 and was recorded as a derivative liability with an offset to senior unsecured notes on our Consolidated Balance Sheets.
Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into earnings over the life of the related debt, except where a material amount is deemed to be ineffective, which would be immediately recognized in the Consolidated Statements of Comprehensive Income. Approximately $2,562,000 of losses, which are included in other comprehensive income (“OCI”), are expected to be reclassified into earnings in the next 12 months.
Cash flows from derivatives accounted for as a fair value or cash flow hedge are classified in the same category as the cash flows from the items being hedged in the Consolidated Statements of Cash Flows.
Foreign Currency Forward Contracts and Cross Currency Swap Contracts Designated as Net Investment Hedges
We use foreign currency forward and cross currency swap contracts to hedge a portion of the net investment in foreign subsidiaries against fluctuations in foreign exchange rates. For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. Dollar of the instrument is recorded as a cumulative translation adjustment component of OCI.
During the nine months ended September 30, 2026 and 2025, we settled certain net investment hedges generating cash proceeds of $5,126,000 and necessitating cash payments of $3,359,000 , respectively. The balance of the cumulative translation adjustment will be reclassified to earnings if the hedged investment is sold or substantially liquidated.
Cross Currency Swap Contracts Designated as Fair Value Hedges
We have entered into cross currency swaps to economically convert our British Pounds Sterling-denominated debt exposure into U.S. dollars and to mitigate the impact of foreign currency translation gains or losses. These swaps are designated as fair value hedges of changes in the fair value of the hedged debt attributable to changes in spot foreign exchange rates. We record the cross currency swaps at fair value in our Consolidated Balance Sheets as assets and liabilities. Changes in the fair value of the cross currency swaps attributable to changes in spot foreign exchange rates, along with the changes in the carrying value of the hedged debt due to changes in spot foreign exchange rates, are recorded in interest expense in the Consolidated Statements of Comprehensive Income and substantially offset each other.
Derivative Contracts Undesignated
We use foreign currency exchange contracts to manage existing exposures to foreign currency exchange risk. Gains and losses resulting from the changes in fair value of these instruments are recorded in interest expense on the Consolidated Statements of Comprehensive Income and are substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures.
Equity Warrants
We received equity warrants through our lending activities, which were accounted for as loan origination fees. The warrants provided us the right to participate in the capital appreciation of the underlying HC-One Group real estate portfolio above a designated price upon liquidation and contain net settlement terms qualifying as derivatives. The warrants were classified within receivables and other assets on our Consolidated Balance Sheets and were measured at fair value with changes in fair value being recognized within loss (gain) on derivatives and financial instruments, net in our Consolidated Statements of
22
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Comprehensive Income. Please refer to Note 3 for information related to consideration for the HC-One acquisition, which included the settlement of the outstanding warrants.
The following presents the notional amount of derivatives and other financial instruments as of the dates indicated (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Derivatives designated as net investment hedges: | ||||||||||||||
| Denominated in Canadian Dollars | C$ | C$ | ||||||||||||
| Denominated in Pounds Sterling | £ | £ | ||||||||||||
| Financial instruments designated as net investment hedges: | ||||||||||||||
| Denominated in Canadian Dollars | C$ | C$ | ||||||||||||
| Denominated in Pounds Sterling | £ | £ | ||||||||||||
| Derivatives designated as fair value hedges: | ||||||||||||||
| Denominated in Pounds Sterling | £ | £ | ||||||||||||
| Interest rate swaps and caps designated as cash flow hedges: | ||||||||||||||
Denominated in Canadian Dollars (1) | C$ | C$ | ||||||||||||
| Interest rate swaps designated as fair value hedges: | ||||||||||||||
| Denominated in U.S. Dollars | $ | $ | ||||||||||||
| Derivative instruments not designated: | ||||||||||||||
| Foreign currency exchange contracts denominated in Canadian Dollars | C$ | C$ | ||||||||||||
The following presents the impact of derivative instruments on the Consolidated Statements of Comprehensive Income for the periods presented (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| Description | Location | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
| Gain (loss) on derivative instruments designated as hedges recognized in income | Interest expense | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Gain (loss) on derivative instruments not designated as hedges recognized in income | Interest expense | ( | ( | ( | ||||||||||||||||||||||||||||
| Gain (loss) on equity warrants recognized in income | Gain (loss) on derivatives and financial instruments, net | ( | ( | |||||||||||||||||||||||||||||
| Gain (loss) on derivative and financial instruments designated as hedges recognized in OCI | OCI | ( | ||||||||||||||||||||||||||||||
13. Commitments and Contingencies
At September 30, 2026, we had 36 outstanding letter of credit obligations totaling $67,895,000 and expiring between 2026 and 2027. At September 30, 2026, we had outstanding construction in progress of $1,239,412,000 and were committed to providing additional funds of approximately $701,878,000 to complete construction. Additionally, at September 30, 2026, we had outstanding investments classified as in substance real estate of $765,981,000 and were committed to provide additional funds of $36,284,000 (see Note 8 for additional information).
We have entered into put-call agreements with third parties in conjunction with certain development projects. Under these agreements, we can initiate a call right or the third party can initiate a put right upon certain conditions being met, which would result in the acquisition of the related property by us, for which we currently have no ownership interest. If all conditions had been met under these agreements as of September 30, 2026, and the put or call rights for each investment had been triggered, the amount payable by us to acquire these properties would have been $475,962,000 .
23
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
14. Stockholders’ Equity
The following is a summary of our stockholders’ equity capital accounts as of the dates indicated:
| September 30, 2026 | December 31, 2025 | |||||||||||||
Preferred Stock, $ | ||||||||||||||
| Authorized shares | ||||||||||||||
| Issued shares | ||||||||||||||
| Outstanding shares | ||||||||||||||
Common Stock, $ | ||||||||||||||
| Authorized shares | ||||||||||||||
| Issued shares | ||||||||||||||
| Outstanding shares | ||||||||||||||
Common Stock
In July 2026, we entered into an equity distribution agreement whereby we can offer and sell up to $7,500,000,000 aggregate amount of our common stock, which replaced our prior equity distribution agreement dated October 28, 2025 (collectively, along with other previous agreements, referred to as the “ATM Programs”). The ATM Programs allows us to enter into forward sale agreements (none outstanding at September 30, 2026). As of September 30, 2026, we had $4,859,303,000 of remaining capacity under the ATM Program. During October 2026, we sold 1,622,950 shares of common stock under the ATM Program.
The following is a summary of our common stock issuances during the nine months ended September 30, 2026 and 2025 (in thousands, except shares and average price amounts):
| Shares Issued | Average Price | Gross Proceeds | Net Proceeds | ||||||||||||||||||||||||||
| 2025 Option exercises | $ | $ | $ | ||||||||||||||||||||||||||
| 2025 ATM Program issuances | |||||||||||||||||||||||||||||
2025 Equity issuance (1) | — | — | |||||||||||||||||||||||||||
| 2025 Redemption of OP Units and DownREIT Units | — | — | |||||||||||||||||||||||||||
| 2025 Stock incentive plans, net of forfeitures | — | — | |||||||||||||||||||||||||||
| 2025 Totals | $ | $ | |||||||||||||||||||||||||||
| 2026 Option exercises | $ | $ | $ | ||||||||||||||||||||||||||
| 2026 ATM Program issuances | |||||||||||||||||||||||||||||
| 2026 Redemption of OP Units and DownREIT Units | — | — | |||||||||||||||||||||||||||
| 2026 Stock incentive plans, net of forfeitures | — | — | |||||||||||||||||||||||||||
2026 Other equity issuances (2) | — | — | |||||||||||||||||||||||||||
| 2026 Totals | $ | $ | |||||||||||||||||||||||||||
(1) Relates to the re-issuance of treasury shares and issuance of common stock in lieu of cash consideration for the acquisition of real property. Please see Note 3 for additional information.
Dividends
The following is a summary of our dividend payments (in thousands, except per share amounts):
| Nine Months Ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Per Share | Amount | Per Share | Amount | ||||||||||||||||||||
| Common stock | $ | $ | $ | $ | |||||||||||||||||||
24
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
On October 26, 2026, the Board of Directors declared a cash dividend for the quarter ended September 30, 2026 of $0.85 per share.
Accumulated Other Comprehensive Income
The following is a summary of accumulated other comprehensive income (loss) as of the dates presented (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Foreign currency translation | $ | ( | $ | ( | ||||||||||
| Derivative and financial instruments designated as hedges | ||||||||||||||
| Total accumulated other comprehensive income (loss) | $ | ( | $ | ( | ||||||||||
15. Stock Incentive Plans
In March 2022, our Board of Directors approved the 2022 Long-Term Incentive Plan (“2022 Plan”), which initially authorized up to 10,000,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board. No further awards were granted under the 2016 Long-Term Incentive Plan after March 28, 2022; however, awards granted under the 2016 Long-Term Incentive Plan prior to March 28, 2022 continue to vest and options expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to participate in the 2022 Plan. The 2022 Plan allows for the issuance of, among other things, stock options, stock appreciation rights, restricted stock units, deferred stock units, performance units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted stock units generally range from three to five years with the options expiring ten years from the date of grant. In April 2025, our Board of Directors adopted, subject to stockholder approval obtained in May 2025, an amendment to the 2022 Plan (the “Amended and Restated Plan”), primarily to increase the aggregate number of shares of common stock authorized for issuance by 10,000,000 shares, bringing the total of shares authorized under the plan to 20,000,000 shares.
During the fourth quarter of 2025, the Board approved the 10 -Year Executive Continuity and Alignment Program (the “10 -Year ECAP”) and granted awards of LTIP Units of Welltower OP (“LTIP Units”) to named executive officers and executive vice presidents. LTIP Units granted under the 10 -Year ECAP become redeemable or exchangeable for shares of our common stock subject to and following the lapse of certain restrictions on transferability, repurchase rights and clawback obligations and are classified as equity awards. The LTIP Units were fully vested on the date of grant for accounting purposes, but remain subject to redemption restrictions, restrictions on transferability, repurchase rights and clawback obligations subject to service-based requirements and/or to achievement of predetermined market conditions (with respect to performance-based LTIP Units). Incremental compensation cost is recognized over the ten-year period during which the related service conditions affecting restrictions on redemptions and transferability and market-conditions are satisfied. Please refer to our 2025 Annual Report on Form 10-K and 2026 Definitive Proxy Statement on Schedule 14A for additional information regarding the 10 -Year ECAP.
The following table summarizes compensation expense recognized for the periods presented (in thousands):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Stock option awards | $ | $ | $ | $ | ||||||||||||||||||||||
| Restricted stock and other awards | ||||||||||||||||||||||||||
| 10-Year ECAP awards | ||||||||||||||||||||||||||
| Total stock based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
25
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
16. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Numerator for basic earnings per share - net income (loss) attributable to common stockholders | $ | $ | $ | $ | ||||||||||||||||||||||
| Adjustment for net income (loss) attributable to OP Units and DownREIT Units | ||||||||||||||||||||||||||
Numerator for diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator for basic earnings per share - weighted average shares | ||||||||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||||||||
Employee stock options | ||||||||||||||||||||||||||
| Unvested restricted shares and units | ||||||||||||||||||||||||||
OP Units and DownREIT Units | ||||||||||||||||||||||||||
Employee stock purchase program | ||||||||||||||||||||||||||
| Exchangeable Notes | ||||||||||||||||||||||||||
| Dilutive potential common shares | ||||||||||||||||||||||||||
Denominator for diluted earnings per share - adjusted weighted average shares | ||||||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | ||||||||||||||||||||||
17. Disclosure about Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy exists for disclosures of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information. The three levels are defined below:
•Level 1 - Quoted prices in active markets for identical assets or liabilities.
•Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:
Investments in Sales-Type Leases — The fair value of sales-type leases is generally estimated by using Level 2 and Level 3 inputs to discount the estimated future cash flows of the lease using rates implicit in the lease, and an estimate of the unguaranteed residual value.
Mortgage Loans, Other Real Estate Loans and Non-real Estate Loans Receivable — The fair value of mortgage loans, other real estate loans and non-real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
Cash and Cash Equivalents and Restricted Cash — The carrying amount approximates fair value.
26
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Borrowings Under Primary Unsecured Credit Facility and Commercial Paper Programs — The carrying amount of the primary unsecured credit facility and commercial paper programs approximates fair value because the borrowings are interest rate adjustable.
Senior Unsecured Notes — The fair value of the senior unsecured notes payable is estimated based on Level 1 publicly available trading prices. The carrying amount of the variable rate senior unsecured notes approximates fair value because they are interest rate adjustable.
Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.
Foreign Currency Forward Contracts, Interest Rate Swaps and Cross Currency Swaps — Foreign currency forward contracts, interest rate swaps and cross currency swaps are recorded in other assets or other liabilities on the balance sheet at fair value that is derived from Level 2 observable market data, including yield curves and foreign exchange rates.
Redeemable DownREIT Unitholder Interests — Our redeemable DownREIT Unitholder interests are recorded on the balance sheet at fair value using Level 2 inputs unless the fair value is below the initial amount, in which case the redeemable DownREIT Unitholder interests are recorded at the initial amount adjusted for distributions to the unitholders and income or loss attributable to the unitholders. The fair value is measured using the closing price of our common stock, as units may be redeemed at the election of the holder for cash or, at our option, one share of our common stock per unit, subject to adjustment in certain circumstances.
The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||||||
| Financial assets: | ||||||||||||||||||||||||||
| Investments in sales-type leases, net | $ | $ | $ | $ | ||||||||||||||||||||||
| Mortgage loans receivable | ||||||||||||||||||||||||||
| Other real estate loans receivable | ||||||||||||||||||||||||||
| Cash and cash equivalents | ||||||||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||||||||
| Non-real estate loans receivable | ||||||||||||||||||||||||||
| Foreign currency forward contracts, interest rate swaps and cross currency swaps | ||||||||||||||||||||||||||
| Financial liabilities: | ||||||||||||||||||||||||||
| Borrowings under unsecured credit facility and commercial paper programs | $ | $ | $ | $ | ||||||||||||||||||||||
| Senior unsecured notes | ||||||||||||||||||||||||||
| Secured debt | ||||||||||||||||||||||||||
| Foreign currency forward contracts, interest rate swaps and cross currency swaps | ||||||||||||||||||||||||||
| Redeemable DownREIT Unitholder interests | $ | $ | $ | $ | ||||||||||||||||||||||
Items Measured at Fair Value on a Recurring Basis
The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following summarizes items measured at fair value on a recurring basis (in thousands):
| Fair Value Measurements as of September 30, 2026 | ||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||
Foreign currency forward contracts, interest rate swaps and cross currency swaps, net asset (liability)(1) | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
(1) Please see Note 12 for additional information.
27
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Items Measured at Fair Value on a Nonrecurring Basis
18. Segment Reporting
We invest in seniors housing and healthcare real estate. We evaluate our business and make resource allocations for our three
We evaluate performance based on consolidated NOI of each segment. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. We believe NOI provides investors relevant and useful information as it measures the operating performance of our properties at the property level on an unleveraged basis. The Chief Operating Decision Maker (“CODM”), who is our Vice Chairman & Chief Operating Officer, uses NOI to make decisions about resource allocations and to assess the property-level performance of our properties.
Non-segment revenue consists mainly of interest income on loans receivable balances. Additionally, it includes interest income earned on cash investments recorded in other income. Non-segment assets consist of corporate assets including loans receivable, cash, deferred loan expenses and corporate offices and equipment, among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.
During the quarter ended September 30, 2026, we reclassified asset management services related to the Fund to Non-segment/Corporate from the Seniors Housing Operating segment to better align with the manner in which the CODM reviews results. Accordingly, the segment information provided in this Note has been updated to conform to the current presentation for all periods presented.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. All inter-segment transactions are eliminated.
28
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information for the reportable segments for the three months ended September 30, 2026 (in thousands):
Three Months Ended September 30, 2026 | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Rental income | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||||||||
| Property operating expenses | ||||||||||||||||||||||||||||||||
| Consolidated net operating income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | ||||||||||||||||||||||||||||||||
| Provision for loan losses, net | ||||||||||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | ( | |||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | |||||||||||||||||||||||||||||||
The following table summarizes significant expense categories by segment for the three months ended September 30, 2026 (in thousands):
| Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | ||||||||||||||||||||||||||||
| Compensation | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Utilities | ||||||||||||||||||||||||||||||||
| Food | ||||||||||||||||||||||||||||||||
| Repairs and maintenance | ||||||||||||||||||||||||||||||||
| Property taxes | ||||||||||||||||||||||||||||||||
Other segment expenses(1) | ||||||||||||||||||||||||||||||||
| Total property operating expenses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1) Other segment expenses for Seniors Housing Operating include management fees, insurance expense, marketing, supplies, other miscellaneous expenses and right of use asset amortization for properties subject to lease. Triple-net other segment expenses include right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Outpatient Medical other segment expenses include insurance expense, right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Non-segment/Corporate other segment expenses primarily represent insurance costs related to our captive insurance program. | ||||||||||||||||||||||||||||||||
29
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information for the reportable segments for the three months ended September 30, 2025 (in thousands):
Three Months Ended September 30, 2025 | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Rental income | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||||||||
| Property operating expenses | ||||||||||||||||||||||||||||||||
| Consolidated net operating income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | ||||||||||||||||||||||||||||||||
| Provision for loan losses, net | ||||||||||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ( | |||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | ( | |||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | |||||||||||||||||||||||||||||||
The following table summarizes significant expense categories by segment for the three months ended September 30, 2025 (in thousands):
| Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | ||||||||||||||||||||||||||||
| Compensation | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Utilities | ||||||||||||||||||||||||||||||||
| Food | ||||||||||||||||||||||||||||||||
| Repairs and maintenance | ||||||||||||||||||||||||||||||||
| Property taxes | ||||||||||||||||||||||||||||||||
Other segment expenses(1) | ||||||||||||||||||||||||||||||||
| Total property operating expenses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1) Other segment expenses for Seniors Housing Operating include management fees, insurance expense, marketing, supplies, other miscellaneous expenses and right of use asset amortization for properties subject to lease. Triple-net other segment expenses include right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Outpatient Medical other segment expenses include insurance expense, right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Non-segment/Corporate other segment expenses primarily represent insurance costs related to our captive insurance program. | ||||||||||||||||||||||||||||||||
The following table summarizes our total assets by segment for the periods presented (in thousands):
| As of | ||||||||||||||||||||||||||
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Assets: | Amount | % | Amount | % | ||||||||||||||||||||||
| Seniors Housing Operating | $ | % | $ | % | ||||||||||||||||||||||
| Triple-net | % | % | ||||||||||||||||||||||||
| Outpatient Medical | % | % | ||||||||||||||||||||||||
| Non-segment/Corporate | % | % | ||||||||||||||||||||||||
| Total | $ | % | $ | % | ||||||||||||||||||||||
30
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information for the reportable segments for the nine months ended September 30, 2026 (in thousands):
Nine Months Ended September 30, 2026 | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Rental income | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||||||||
| Property operating expenses | ||||||||||||||||||||||||||||||||
| Consolidated net operating income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | ||||||||||||||||||||||||||||||||
| Provision for loan losses, net | ||||||||||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | ( | |||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | |||||||||||||||||||||||||||||||
The following table summarizes significant expense categories by segment for the nine months ended September 30, 2026 (in thousands):
| Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | ||||||||||||||||||||||||||||
| Compensation | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Utilities | ||||||||||||||||||||||||||||||||
| Food | ||||||||||||||||||||||||||||||||
| Repairs and maintenance | ||||||||||||||||||||||||||||||||
| Property taxes | ||||||||||||||||||||||||||||||||
Other segment expenses(1) | ||||||||||||||||||||||||||||||||
| Total property operating expenses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1) Other segment expenses for Seniors Housing Operating include management fees, insurance expense, marketing, supplies, other miscellaneous expenses and right of use asset amortization for properties subject to lease. Triple-net other segment expenses include right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Outpatient Medical other segment expenses include insurance expense, right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Non-segment/Corporate other segment expenses primarily represent insurance costs related to our captive insurance program. | ||||||||||||||||||||||||||||||||
31
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes information for the reportable segments for the nine months ended September 30, 2025 (in thousands):
Nine Months Ended September 30, 2025 | Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | |||||||||||||||||||||||||||
| Resident fees and services | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Rental income | ||||||||||||||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||||||||
| Property operating expenses | ||||||||||||||||||||||||||||||||
| Consolidated net operating income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | ||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | ||||||||||||||||||||||||||||||||
| Provision for loan losses, net | ( | |||||||||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||||||||
| Other expenses | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | ||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | ||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | ( | |||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | ||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | ||||||||||||||||||||||||||||||||
| Net income (loss) | $ | |||||||||||||||||||||||||||||||
The following table summarizes significant expense categories by segment for the nine months ended September 30, 2025 (in thousands):
| Seniors Housing Operating | Triple-net | Outpatient Medical | Non-segment/Corporate | Total | ||||||||||||||||||||||||||||
| Compensation | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Utilities | ||||||||||||||||||||||||||||||||
| Food | ||||||||||||||||||||||||||||||||
| Repairs and maintenance | ||||||||||||||||||||||||||||||||
| Property taxes | ||||||||||||||||||||||||||||||||
Other segment expenses(1) | ||||||||||||||||||||||||||||||||
| Total property operating expenses | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
(1) Other segment expenses for Seniors Housing Operating include management fees, insurance expense, marketing, supplies, other miscellaneous expenses and right of use asset amortization for properties subject to lease. Triple-net other segment expenses include right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Outpatient Medical other segment expenses include insurance expense, right of use asset amortization for properties subject to ground leases and other miscellaneous expenses. Non-segment/Corporate other segment expenses primarily represent insurance costs related to our captive insurance program. | ||||||||||||||||||||||||||||||||
32
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Our portfolio of properties and other investments is located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for the periods presented (dollars in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||
| United States | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Canada | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Resident Fees and Services: | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||
| United States | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Canada | % | % | % | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Canada | % | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
19. Income Taxes and Distributions
We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of taxable income in the current year are also subject to a 4% federal excise tax. The main differences between undistributed net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.
Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, a REIT may lease “qualified healthcare properties” on an arm’s-length basis to a taxable REIT subsidiary (“TRS”) if the property is operated on behalf of such TRS by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” A “qualified healthcare property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility or other licensed facility which extends medical or nursing or ancillary services to patients. We have entered into various joint ventures that were structured under RIDEA. Resident level rents and related operating expenses for these facilities are reported in the unaudited consolidated financial statements and are subject to federal and state income taxes as the operations of such facilities are included in TRS entities. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.
Income taxes reflected in the financial statements primarily consist of U.S. federal, state and local income taxes, as well as non-U.S. income-based and withholding taxes on certain investments located in jurisdictions outside the U.S. We determine interim income tax expense (benefit) by applying the applicable annual effective tax rates to the ordinary income (loss) of our TRS entities and recognizing the tax effects of discrete items in the periods in which they occur. The income tax benefit for the nine months ended September 30, 2026 included a $71,304,000 deferred tax benefit recognized by a Canadian subsidiary as a result of a reduction in its valuation allowance. The reduction in the valuation allowance was supported by net deferred tax liabilities acquired during the period.
In 2014, we established certain wholly-owned direct and indirect subsidiaries in Luxembourg and Jersey and transferred interests in certain foreign investments into this holding company structure. The structure includes a property holding company
33
WELLTOWER INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
that is tax resident in the United Kingdom. No material adverse current tax consequences in Luxembourg, Jersey or the United Kingdom resulted from the creation of this holding company structure and most of the subsidiary entities in the structure are treated as disregarded entities of the company for U.S. federal income tax purposes. Subsequent to 2014, we transferred certain subsidiaries to the United Kingdom, while some wholly-owned direct and indirect subsidiaries remain in Luxembourg and Jersey. We reflect current and deferred tax liabilities for any such withholding taxes incurred from this holding company structure in our consolidated financial statements. Generally, given current statutes of limitations, we are subject to audit by the foreign, federal, state and local taxing authorities under applicable local laws.
The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon in principle by over 140 countries. The model rules provide a framework for applying the minimum tax and some countries have adopted Pillar 2 effective January 1, 2024; however, countries must individually enact Pillar 2, which may result in variation in the application of the model rules and timelines. We will continue to evaluate the potential consequences of Pillar 2 on our longer-term financial position.
20. Variable Interest Entities
We have entered into joint ventures and have certain subsidiaries that are either wholly owned by us or by consolidated joint ventures which own real estate investments and are deemed to be VIEs. Our VIEs primarily hold real estate assets within our Seniors Housing Operating and Triple-net portfolios, the nature and risk of which are consistent with our overall portfolio. We have concluded that we are the primary beneficiary of these VIEs based on a combination of operational control of the entities and the rights to receive residual returns or the obligation to absorb losses arising from the entities. Capital contributions may be required in connection with initial entity formations and to fund development activities. Otherwise, our operating VIEs generally have been and are expected to be funded from the ongoing operations of the underlying properties. Additionally, we consolidate a levered entity that has been deemed a VIE and is invested in our Fund. We have no ownership interest in the entity but have concluded that we are the primary beneficiary primarily due to the guarantee of its unsecured debt to third parties. Accordingly, such entities have been consolidated, and the table below summarizes the balance sheets of consolidated VIEs in the aggregate (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||
| Assets: | ||||||||||||||
| Net real estate investments | $ | $ | ||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Receivables and other assets | ||||||||||||||
| Investments in unconsolidated entities | ||||||||||||||
Total assets(1) | $ | $ | ||||||||||||
| Liabilities and equity: | ||||||||||||||
| Senior unsecured notes | $ | $ | ||||||||||||
| Secured debt | ||||||||||||||
| Lease liabilities | ||||||||||||||
| Accrued expenses and other liabilities | ||||||||||||||
Total equity(2) | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
(1) As noted above, in the case of the VIE that invests in the Fund, Welltower has guaranteed the unsecured third party debt. For all other VIEs, assets of the consolidated VIEs can only be used to settle obligations relating to such VIEs. Liabilities of the consolidated VIEs represent claims against the specific assets of the VIEs and the VIEs’ creditors do not have recourse to Welltower.
(2) Includes noncontrolling interests.
We recognized revenues from consolidated VIEs in the aggregate of $229,322,000 and $640,982,000 for the three and nine months ended September 30, 2026, and $188,457,000 and $500,591,000 for the same periods in 2025, respectively.
In addition, we have certain entities that qualify as unconsolidated VIEs, including borrowers of loans receivable and in substance real estate investments. Our maximum exposure on these entities is limited to the net carrying value of the investments. Refer to Note 7 and Note 8 for additional details.
34
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| EXECUTIVE SUMMARY | ||||||||
| Company Overview | 36 | |||||||
| Business Strategy | 36 | |||||||
| Key Transactions | 37 | |||||||
| Key Performance Indicators, Trends and Uncertainties | 38 | |||||||
| Corporate Governance | 41 | |||||||
| LIQUIDITY AND CAPITAL RESOURCES | ||||||||
| Sources and Uses of Cash | 41 | |||||||
| Off-Balance Sheet Arrangements | 42 | |||||||
| Contractual Obligations | 43 | |||||||
| Capital Structure | 43 | |||||||
| Supplemental Guarantor Information | 45 | |||||||
| RESULTS OF OPERATIONS | ||||||||
| Summary | 45 | |||||||
| Seniors Housing Operating | 46 | |||||||
| Triple-net | 48 | |||||||
| Outpatient Medical | 49 | |||||||
| Non-Segment/Corporate | 51 | |||||||
| OTHER | ||||||||
| Non-GAAP Financial Measures | 52 | |||||||
| Critical Accounting Policies and Estimates | 60 | |||||||
| Cautionary Statement Regarding Forward-Looking Statements | 62 | |||||||
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read together with the Consolidated Financial Statements and related Notes thereto included in Item 1 of this Quarterly Report on Form 10-Q. Other important factors are identified in our Annual Report on Form 10-K for the year ended December 31, 2025, including factors identified under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
We are structured as an umbrella partnership REIT under which substantially all of our business is conducted through Welltower OP LLC, the day-to-day management of which is exclusively controlled by Welltower Inc. Welltower Inc. has no material assets or liabilities other than its investment in Welltower OP LLC. Welltower OP LLC is generally the borrower under, and Welltower Inc. is the guarantor of, the unsecured notes described in Note 11 to our unaudited consolidated financial statements.
Unless stated otherwise or the context otherwise requires, references to “Welltower” mean Welltower Inc. and references to “Welltower OP” mean Welltower OP LLC. References to “we,” “us” and “our” mean collectively Welltower, Welltower OP and those entities/subsidiaries owned or controlled by Welltower and/or Welltower OP.
Executive Summary
Company Overview
Welltower Inc. (NYSE: WELL), a real estate investment trust (“REIT”) and S&P 500 company, is positioned at the center of the silver economy, focusing on rental housing for aging seniors across the United States, United Kingdom and Canada. Our portfolio predominantly consists of 2,500+ seniors and wellness housing communities that are positioned at the intersection of housing, healthcare and hospitality, creating vibrant communities for mature renters and older adults.
Welltower is the initial member and majority owner of Welltower OP, with an approximate ownership interest of 98.168% as of September 30, 2026. All of our property ownership, development and related business operations are conducted through Welltower OP and Welltower has no material assets or liabilities other than its investment in Welltower OP. Welltower issues equity from time to time, the net proceeds of which it is obligated to contribute as additional capital to Welltower OP. All debt including credit facilities, senior notes and secured debt is incurred by Welltower OP and its subsidiaries, and Welltower has fully and unconditionally guaranteed all such existing senior unsecured notes, with the exception of the C$300,000,000 of 2.95% senior unsecured notes due 2027. The C$300,000,000 senior unsecured notes due 2027 have been issued through private placement by a wholly owned subsidiary of Welltower OP and are fully and unconditionally guaranteed by Welltower OP.
The following table summarizes our consolidated portfolio for the three months ended September 30, 2026 (dollars in thousands):
| Percentage of | Number of | |||||||||||||||||||
| Type of Property | NOI(1) | NOI | Properties | |||||||||||||||||
| Seniors Housing Operating | $ | 897,742 | 65.2 | % | 1,902 | |||||||||||||||
| Triple-net | 445,867 | 32.4 | % | 865 | ||||||||||||||||
| Outpatient Medical | 32,604 | 2.4 | % | 51 | ||||||||||||||||
| Totals | $ | 1,376,213 | 100.0 | % | 2,818 | |||||||||||||||
(1) Represents consolidated NOI and excludes our share of investments in unconsolidated entities. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount. See “Non-GAAP Financial Measures” below for additional information and reconciliation. | ||||||||||||||||||||
Business Strategy
Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders through annual increases in NOI and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and healthcare real estate and diversify our investment portfolio by property type, relationship and geographic location.
Substantially all of our revenues are derived from operating lease rentals, resident fees and services, interest earned on outstanding loans receivable and interest earned on short-term deposits. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our obligors/partners experience operating difficulties and become unable to generate sufficient cash to make payments or operating distributions to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our external property management partners manage and monitor the Outpatient Medical portfolio. We evaluate the operating environment in each property’s
36
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
market to determine the likely trend in operating performance of the facility. When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we generally aim to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.
In addition to our asset management and research efforts, we aim to structure our relevant investments to mitigate payment risk. Operating leases and loans are normally credit enhanced by guarantees and/or letters of credit. Also, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.
For the nine months ended September 30, 2026, resident fees and services and rental income represented 84% and 13% of total revenues, respectively. Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.
Our primary sources of cash include resident fees and services revenue, rental income and interest receipts, interest earned on short-term deposits, borrowings under our unsecured revolving credit facility and commercial paper programs, issuances of debt and equity securities, including through our ATM Program (as defined below), proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, general and administrative expenses and other expenses. Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.
We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our unsecured revolving credit facility and commercial paper programs, equity issuances, internally generated cash and the proceeds from investment dispositions.
Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also likely that investment dispositions may occur in the future and we expect to reinvest the proceeds from any investment dispositions in new investments. In the event that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our unsecured revolving credit facility and commercial paper programs or issue debt or equity securities, including through our ATM Program. At September 30, 2026, we had $2,274,910,000 of cash and cash equivalents, $141,097,000 of restricted cash and $5,208,520,000 of available borrowing capacity under our unsecured revolving credit facility.
Key Transactions
Capital The following summarizes key capital transactions that occurred during the nine months ended September 30, 2026:
•In July 2026, we entered into the ATM Program pursuant to which we may offer to sell up to $7,500,000,000 of common stock, which replaced our prior equity distribution agreement dated October 28, 2025, allowing us to sell up to $7,500,000,000 of common stock (collectively, along with other previous agreements, referred to as the “ATM Programs”). During the nine months ended September 30, 2026, we sold 34,646,633 shares of common stock under the ATM Programs generating gross proceeds of approximately $7,555,540,000.
•In March 2026, we amended our $6,250,000,000 senior unsecured revolving credit facility, extending maturities, improving pricing by 15 basis points and increasing our total available credit facilities to $7,500,000,000. Concurrently, we repaid our existing $1,000,000,000 USD term loan and C$250,000,000 term loan with cash on hand.
•In March 2026, we increased the size of our USD commercial paper program to $3,000,000,000.
•In April 2026, we repaid our $700,000,000 4.25% senior unsecured notes at maturity.
•In June 2026, we amended our C$2,747,615,000 unsecured term loans to extend the maturity date to April 9, 2027 and reduce the applicable margin by five basis points.
•In July 2026, we completed the issuance of C$1,150,000,000 aggregate principal amount of senior unsecured notes, consisting of C$750,000,000 of 3.85% notes due August 15, 2031 and C$400,000,000 of 4.15% notes due August 15, 2033.
•In August 2026, we established a Canadian-dollar denominated commercial paper program. Under the terms of the program, we may issue unsecured commercial paper notes with maturities that vary, but do not exceed 365 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of C$1,000,000,000.
37
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
•During the nine months ended September 30, 2026, we issued $332,884,000 of secured debt at a blended average interest rate of 4.15% and assumed $556,755,000 of secured debt at a blended average interest rate of 4.18% after considering the effects of interest rate swaps.
•During the nine months ended September 30, 2026, we extinguished $141,259,000 of secured debt at a blended average interest rate of 3.60%.
•During the nine months ended September 30, 2026, holders exchanged $614,749,000 aggregate principal amount of our 2028 Exchangeable Notes.
Investments The following summarizes our property acquisitions and joint venture investments completed during the nine months ended September 30, 2026 (dollars in thousands):
| Properties | Book Amount(1) | Capitalization Rates(2) | ||||||||||||||||||
| Seniors Housing Operating | 112 | $ | 8,058,150 | 4.8 | % | |||||||||||||||
| Triple-net | 115 | 2,530,777 | 8.6 | % | ||||||||||||||||
| Outpatient Medical | 1 | 99,332 | 5.7 | % | ||||||||||||||||
| Totals | 228 | $ | 10,688,259 | 5.8 | % | |||||||||||||||
(1) Represents amounts recorded in net real estate investments including fair value adjustments pursuant to U.S. GAAP. See Note 3 to our unaudited consolidated financial statements for additional information. | ||||||||||||||||||||
(2) Represents annualized contractual or projected NOI to be received divided by investment amounts. | ||||||||||||||||||||
In October 2026, we announced that we have closed or expect to close approximately $7 billion of seniors housing acquisitions through the end of the year. These acquisitions include a Canadian portfolio of 27 properties for a purchase price of C$2.2 billion, which closed on October 1, 2026. The acquisition, which will be reported in our Seniors Housing Operating segment, was funded through the assumption of C$639 million of secured debt, with the remainder funded with cash on hand. In addition, included in our announced investment activity is a 62 property portfolio in the United States that we are under contract to acquire for approximately $2.6 billion. The transaction is expected to be funded with cash and OP unit issuances in the fourth quarter. The portfolio will be leased to a tenant under a long term triple-net master lease. Expected acquisitions not yet closed are subject to customary closing conditions and regulatory approvals.
Dispositions The following summarizes property dispositions completed during the nine months ended September 30, 2026 (dollars in thousands):
| Properties | Proceeds(1) | Book Amount(2) | Capitalization Rates(3) | |||||||||||||||||||||||
| Seniors Housing Operating | 14 | $ | 175,934 | $ | 131,048 | 4.5 | % | |||||||||||||||||||
| Triple-net | 44 | 635,378 | 626,797 | 7.6 | % | |||||||||||||||||||||
| Outpatient Medical | 99 | 1,977,396 | 1,344,459 | 5.7 | % | |||||||||||||||||||||
| Totals | 157 | $ | 2,788,708 | $ | 2,102,304 | 6.1 | % | |||||||||||||||||||
(1) Represents cash and non-cash proceeds received upon disposition. | ||||||||||||||||||||||||||
(2) Represents carrying value of net real estate assets at time of disposition. See Note 5 to our unaudited consolidated financial statements for additional information. | ||||||||||||||||||||||||||
(3) Represents annualized contractual income that was being received in cash at date of disposition divided by stated purchase price. | ||||||||||||||||||||||||||
Dividends On October 26, 2026, our Board of Directors declared a cash dividend for the quarter ended September 30, 2026 of $0.85 per share. On November 19, 2026, we will pay our 222nd consecutive quarterly cash dividend to stockholders of record on November 10, 2026.
Key Performance Indicators, Trends and Uncertainties
We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to operating performance, credit strength and concentration risk. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes.
Operating Performance We believe that net income and net income attributable to common stockholders (“NICS”) as reflected in the Consolidated Statements of Comprehensive Income are the most appropriate earnings measures. Other useful supplemental measures of our operating performance include funds from operations attributable to common stockholders (“FFO”) and consolidated net operating income (“NOI”); however, these supplemental measures are not defined by U.S. GAAP. Please refer to the “Non-GAAP Financial Measures” section for further discussion and reconciliations. These earnings measures are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies.
38
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 414,823 | $ | 462,975 | $ | 752,324 | $ | 117,767 | $ | 282,186 | $ | 304,618 | $ | 257,266 | ||||||||||||||||||||||||||||||
| NICS | 396,587 | 445,002 | 728,672 | 96,441 | 280,559 | 301,888 | 257,957 | |||||||||||||||||||||||||||||||||||||
| FFO | 1,070,791 | 1,153,653 | 982,548 | (597,337) | 824,375 | 825,717 | 765,197 | |||||||||||||||||||||||||||||||||||||
| NOI | 1,469,751 | 1,394,463 | 1,296,506 | 1,247,079 | 1,108,644 | 1,033,533 | 960,697 | |||||||||||||||||||||||||||||||||||||
Credit Strength We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt, net of cash and restricted cash. The coverage ratios indicate our ability to service interest and fixed charges (interest and secured debt principal amortization). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain a capital structure consistent with our current profile. The coverage ratios are based on earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Please refer to the “Non-GAAP Financial Measures” section for further discussion and reconciliation of these measures. Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Net debt to book capitalization ratio | 26% | 25% | 23% | 25% | 20% | 24% | 26% | |||||||||||||||||||||||||||||||||||||
| Net debt to undepreciated book capitalization ratio | 22% | 21% | 20% | 21% | 17% | 19% | 21% | |||||||||||||||||||||||||||||||||||||
| Net debt to enterprise value ratio | 9% | 9% | 9% | 10% | 8% | 10% | 11% | |||||||||||||||||||||||||||||||||||||
| Interest coverage ratio | 7.07x | 7.52x | 8.27x | 4.63x | 6.21x | 6.75x | 6.14x | |||||||||||||||||||||||||||||||||||||
| Fixed charge coverage ratio | 6.40x | 6.76x | 7.59x | 4.27x | 5.60x | 6.03x | 5.58x | |||||||||||||||||||||||||||||||||||||
Concentration Risk We evaluate our concentration risk in terms of NOI by property mix, relationship mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our NOI could be at risk if certain sectors were to experience downturns. Property mix measures the portion of our NOI that relates to our various property types and excludes interest income earned on our loan portfolio, which is classified as Non-segment/Corporate. Relationship mix measures the portion of our NOI that relates to our current top five relationships. Geographic mix measures the portion of our NOI that relates to our current top five states (or countries outside the U.S.).
39
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table reflects our recent historical trends of concentration risk by NOI for the periods indicated below:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||||||||||||||||||||||||
Property mix:(1) | ||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating | 65% | 66% | 64% | 59% | 57% | 56% | 55% | |||||||||||||||||||||||||||||||||||||
| Triple-net | 32% | 31% | 32% | 32% | 28% | 28% | 28% | |||||||||||||||||||||||||||||||||||||
| Outpatient Medical | 3% | 3% | 4% | 9% | 15% | 16% | 17% | |||||||||||||||||||||||||||||||||||||
Relationship mix:(1) | ||||||||||||||||||||||||||||||||||||||||||||
| Barchester | 10% | 11% | 11% | 9% | —% | —% | —% | |||||||||||||||||||||||||||||||||||||
| Cogir Senior Living | 8% | 8% | 8% | 7% | 8% | 8% | 7% | |||||||||||||||||||||||||||||||||||||
| Avir Health Group | 8% | 6% | 6% | 6% | 4% | 3% | 1% | |||||||||||||||||||||||||||||||||||||
| Care UK | 6% | 6% | 7% | 6% | 5% | 5% | 5% | |||||||||||||||||||||||||||||||||||||
| Oakmont Management Group | 4% | 4% | 4% | 4% | 4% | 4% | 4% | |||||||||||||||||||||||||||||||||||||
| Remaining relationships | 64% | 65% | 64% | 68% | 79% | 80% | 83% | |||||||||||||||||||||||||||||||||||||
Geographic mix:(1) | ||||||||||||||||||||||||||||||||||||||||||||
| United Kingdom | 25% | 24% | 25% | 22% | 13% | 13% | 12% | |||||||||||||||||||||||||||||||||||||
| Texas | 13% | 12% | 12% | 12% | 11% | 10% | 9% | |||||||||||||||||||||||||||||||||||||
| Canada | 8% | 8% | 7% | 6% | 8% | 8% | 7% | |||||||||||||||||||||||||||||||||||||
| California | 7% | 8% | 8% | 9% | 10% | 10% | 11% | |||||||||||||||||||||||||||||||||||||
| Ohio | 6% | 7% | 6% | 5% | 4% | 5% | 5% | |||||||||||||||||||||||||||||||||||||
| Remaining geographic areas in the U.S. | 41% | 41% | 42% | 46% | 54% | 54% | 56% | |||||||||||||||||||||||||||||||||||||
(1) Excludes our share of investments in unconsolidated entities. Entities in which we have a joint venture with a minority partner are shown at 100% of the joint venture amount. | ||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Expirations The following table sets forth information regarding operating lease expirations for certain portions of our portfolio as of September 30, 2026 (dollars in thousands):
Expiration Year(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | Thereafter | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Triple-net: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Properties | 30 | 2 | 3 | 5 | 20 | 2 | 121 | 1 | 1 | 27 | 644 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base rent (2) | $ | 17,570 | $ | 1,311 | $ | 6,860 | $ | 1,149 | $ | 43,659 | $ | 4,762 | $ | 138,108 | $ | 1,911 | $ | 433 | $ | 53,252 | $ | 1,135,076 | |||||||||||||||||||||||||||||||||||||||||||||||||
| % of base rent | 1.3 | % | 0.1 | % | 0.5 | % | 0.1 | % | 3.1 | % | 0.3 | % | 9.8 | % | 0.1 | % | — | % | 3.8 | % | 80.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Units/beds | 1,167 | 295 | 346 | 257 | 2,262 | 225 | 8,156 | 100 | 81 | 2,391 | 64,624 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of units/beds | 1.5 | % | 0.4 | % | 0.4 | % | 0.3 | % | 2.8 | % | 0.3 | % | 10.2 | % | 0.1 | % | 0.1 | % | 3.0 | % | 80.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Outpatient Medical: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Square feet | 238,093 | 1,000 | 78,764 | 84,956 | 212,441 | 196,681 | 61,657 | — | 129,864 | 196,082 | 2,568,171 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base rent (2) | $ | 5,815 | $ | 23 | $ | 2,020 | $ | 2,201 | $ | 4,619 | $ | 3,538 | $ | 2,473 | $ | — | $ | 3,420 | $ | 5,053 | $ | 88,471 | |||||||||||||||||||||||||||||||||||||||||||||||||
| % of base rent | 4.9 | % | — | % | 1.7 | % | 1.9 | % | 3.9 | % | 3.0 | % | 2.1 | % | — | % | 2.9 | % | 4.3 | % | 75.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | 25 | 1 | 3 | 3 | 4 | 3 | 2 | — | 2 | 3 | 34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| % of leases | 31.3 | % | 1.3 | % | 3.8 | % | 3.8 | % | 5.0 | % | 3.8 | % | 2.5 | % | — | % | 2.5 | % | 3.8 | % | 42.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
(1) Excludes our share of investments in unconsolidated entities, developments, land parcels, loans receivable and sub-leases. Investments classified as held for sale are included in the current year. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) The most recent monthly cash base rent annualized. Base rent does not include tenant recoveries or amortization of above and below market lease intangibles or other non-cash income. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved, and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Cautionary Statement Regarding Forward-Looking Statements” and other sections of this Quarterly Report on Form 10-Q. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to our
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Annual Report on Form 10-K for the year ended December 31, 2025, under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Corporate Governance
Maintaining investor confidence and trust is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on our website at www.welltower.com/investors/governance. The information on our website is not incorporated by reference in this Quarterly Report on Form 10-Q, and our web address is included as an inactive textual reference only.
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary sources of cash include resident fees and services, rent and interest receipts, interest earned on short-term deposits, borrowings under our unsecured revolving credit facility and commercial paper programs, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, general and administrative expenses and other expenses. Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash for the next twelve months and thereafter. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below.
The following is a summary of our sources and uses of cash flows for the periods presented (dollars in thousands):
| Nine Months Ended | Change | |||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | $ | % | |||||||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | $ | 5,209,539 | $ | 3,711,457 | $ | 1,498,082 | 40 | % | ||||||||||||||||||
| Cash provided from (used in) operating activities | 2,676,688 | 2,227,348 | 449,340 | 20 | % | |||||||||||||||||||||
| Cash provided from (used in) investing activities | (9,860,509) | (5,057,578) | (4,802,931) | (95) | % | |||||||||||||||||||||
| Cash provided from (used in) financing activities | 4,439,809 | 5,967,156 | (1,527,347) | (26) | % | |||||||||||||||||||||
| Effect of foreign currency translation | (49,520) | 92,190 | (141,710) | (154) | % | |||||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 2,416,007 | $ | 6,940,573 | $ | (4,524,566) | (65) | % | ||||||||||||||||||
Operating Activities Please see “Results of Operations” for discussion of net income fluctuations. For the nine months ended September 30, 2026 and 2025, cash flows provided from operations exceeded cash distributions to stockholders.
Investing Activities The changes in net cash provided from/used in investing activities are primarily attributable to net changes in real property investments and dispositions, loans receivable and investments in unconsolidated entities, which are summarized above in “Key Transactions.” Please refer to Notes 3 and 5 of our unaudited consolidated financial statements for additional information. The following is a summary of cash used in non-acquisition capital improvement activities for the periods presented (dollars in thousands):
| Nine Months Ended | Change | |||||||||||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | $ | % | |||||||||||||||||||||||||||||
| New development | $ | 360,361 | $ | 333,981 | $ | 26,380 | 7.9 | % | ||||||||||||||||||||||||
| Recurring capital expenditures, tenant improvements and lease commissions | 331,043 | 250,948 | 80,095 | 31.9 | % | |||||||||||||||||||||||||||
| Renovations, redevelopments and other capital improvements | 606,052 | 485,340 | 120,712 | 24.9 | % | |||||||||||||||||||||||||||
| Total | $ | 1,297,456 | $ | 1,070,269 | $ | 227,187 | 21.2 | % | ||||||||||||||||||||||||
The change in new development is primarily due to the number and size of construction projects ongoing during the relevant periods. Renovations, redevelopments and other capital improvements includes capital spend identified during underwriting related to recently closed acquisitions, expenditures to maximize property value, increase net operating income, maintain a market-competitive position and/or achieve property stabilization.
Financing Activities The changes in net cash provided from/used in financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuances of common stock and dividend payments. Financing activities that
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
occurred during the nine months ended September 30, 2026 are summarized above in “Key Transactions.” Please also refer to Notes 10, 11 and 14 to our unaudited consolidated financial statements for additional information.
During the nine months ended September 30, 2025, we sold 45,080,143 shares of common stock under our ATM Program, generating gross proceeds of approximately $6,873,247,000.
During the nine months ended September 30, 2025, we extinguished $288,492,000 of secured debt at a blended average interest rate of 5.37%. Additionally, during the nine months ended September 30, 2025, we assumed $469,130,000 of secured debt at a blended average interest rate of 4.45%.
In June 2025, we repaid our $1,250,000,000 4.0% senior unsecured notes at maturity. Additionally, we completed the issuance of $600,000,000 of 4.5% senior unsecured notes due 2030 and $650,000,000 of 5.125% senior unsecured notes due 2035. In August 2025, we completed a follow-on issuance of $400,000,000 of 4.5% senior unsecured notes due 2030 and $600,000,000 of 5.125% senior unsecured notes due 2035. These notes are fungible with and form a single series with the notes issued in June 2025.
Foreign Currency Translation The change in cash from foreign currency translation during the nine months ended September 30, 2026 and 2025 is primarily due to the mark-to-market adjustment of Canadian dollar funds sent to pre-fund the Amica Senior Lifestyles transaction. Please refer to Note 3 of our unaudited consolidated financial statements for additional information.
Off-Balance Sheet Arrangements
At September 30, 2026, we had investments in unconsolidated entities with our ownership generally ranging from 8% to 95%. We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. At September 30, 2026, we had 36 outstanding letter of credit obligations. Please see Notes 8, 12 and 13 to our unaudited consolidated financial statements for additional information.
We have entered into put-call agreements with third parties in conjunction with certain development projects. Under these agreements, we can initiate a call right or the third party can initiate a put right upon certain conditions being met, which would result in the acquisition of the related property by us, for which we currently have no ownership interest. If all conditions had been met under these agreements as of September 30, 2026, and the put or call rights for each investment had been triggered, the amount payable by us to acquire these properties would have been $475,962,000.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Contractual Obligations
The following table summarizes our payment requirements under contractual obligations as of September 30, 2026 (in thousands):
| Payments Due by Period | |||||||||||||||||||||||||||||||||||||||||
| Contractual Obligations | Total | 2026 | 2027-2028 | 2029-2030 | Thereafter | ||||||||||||||||||||||||||||||||||||
Unsecured credit facility and commercial paper (1,2,3) | $ | 1,041,480 | $ | — | $ | — | $ | — | $ | 1,041,480 | |||||||||||||||||||||||||||||||
Senior unsecured notes and term credit facilities:(1,4) | |||||||||||||||||||||||||||||||||||||||||
| U.S. Dollar senior unsecured notes | 10,305,251 | — | 1,670,251 | 3,835,000 | 4,800,000 | ||||||||||||||||||||||||||||||||||||
Canadian Dollar senior unsecured notes(3) | 1,020,365 | — | 211,110 | — | 809,255 | ||||||||||||||||||||||||||||||||||||
Pounds Sterling senior unsecured notes(3) | 1,392,930 | — | 729,630 | — | 663,300 | ||||||||||||||||||||||||||||||||||||
| U.S. Dollar term credit facility | 182,786 | — | 15,000 | 167,786 | — | ||||||||||||||||||||||||||||||||||||
Canadian Dollar term credit facility(3) | 1,933,496 | — | 1,933,496 | — | — | ||||||||||||||||||||||||||||||||||||
Secured debt: (1,3) | |||||||||||||||||||||||||||||||||||||||||
| Consolidated | 3,221,174 | 67,599 | 757,174 | 715,775 | 1,680,626 | ||||||||||||||||||||||||||||||||||||
| Unconsolidated | 731,537 | 16,344 | 224,545 | 26,246 | 464,402 | ||||||||||||||||||||||||||||||||||||
Other financial obligations(4) | 257,221 | 383 | 3,268 | 3,666 | 249,904 | ||||||||||||||||||||||||||||||||||||
Contractual interest obligations:(3,5) | |||||||||||||||||||||||||||||||||||||||||
| Unsecured credit facility and commercial paper | 210,360 | 9,689 | 77,508 | 77,508 | 45,655 | ||||||||||||||||||||||||||||||||||||
| Senior unsecured notes and term loans | 3,264,305 | 132,451 | 983,230 | 704,340 | 1,444,284 | ||||||||||||||||||||||||||||||||||||
| Consolidated secured debt | 838,288 | 33,072 | 241,331 | 160,845 | 403,040 | ||||||||||||||||||||||||||||||||||||
| Unconsolidated secured debt | 145,975 | 9,801 | 63,056 | 53,819 | 19,299 | ||||||||||||||||||||||||||||||||||||
Other financial obligations(4) | 1,527,029 | 5,170 | 41,150 | 40,753 | 1,439,956 | ||||||||||||||||||||||||||||||||||||
Financing lease liabilities(6) | 1,248,677 | 7,104 | 54,238 | 52,828 | 1,134,507 | ||||||||||||||||||||||||||||||||||||
Operating lease liabilities(6) | 2,728,638 | 27,718 | 221,036 | 219,922 | 2,259,962 | ||||||||||||||||||||||||||||||||||||
Purchase obligations(7) | 748,417 | 198,889 | 544,717 | 421 | 4,390 | ||||||||||||||||||||||||||||||||||||
| Total contractual obligations | $ | 30,797,929 | $ | 508,220 | $ | 7,770,740 | $ | 6,058,909 | $ | 16,460,060 | |||||||||||||||||||||||||||||||
(1) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet. | |||||||||||||||||||||||||||||||||||||||||
(2) Commercial paper notes are backstopped by the availability under the unsecured credit facility. We use the maturity date of the unsecured credit facility to determine the remaining term of the commercial paper notes. See Note 10 to our unaudited consolidated financial statements for additional information. | |||||||||||||||||||||||||||||||||||||||||
(3) Based on foreign currency exchange rates in effect as of the balance sheet date. | |||||||||||||||||||||||||||||||||||||||||
(4) See Note 11 to our unaudited consolidated financial statements for additional information. | |||||||||||||||||||||||||||||||||||||||||
(5) Based on variable interest rates in effect as of the balance sheet date. | |||||||||||||||||||||||||||||||||||||||||
(6) See Note 6 to our unaudited consolidated financial statements for additional information. | |||||||||||||||||||||||||||||||||||||||||
(7) See Note 13 to our unaudited consolidated financial statements for additional information. Excludes amounts related to acquisitions under contract that have not yet closed as of September 30, 2026. | |||||||||||||||||||||||||||||||||||||||||
Capital Structure
Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends. Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of September 30, 2026, we were in compliance in all material respects with the covenants under our debt agreements. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured credit facility, the ratings on our senior unsecured notes are used to determine the fees and interest charged. We plan to manage the company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.
On March 28, 2025, Welltower and Welltower OP jointly filed with the SEC an open-ended automatic or “universal” shelf registration statement on Form S-3 (the “New Registration Statement”) covering an indeterminate amount of future offerings of Welltower’s debt securities, common stock, preferred stock, depositary shares, guarantees of debt securities issued by Welltower OP, warrants and units and Welltower OP’s debt securities and guarantees of debt securities issued by Welltower. In connection with the filing of the New Registration Statement, on March 28, 2025, Welltower filed with the SEC five prospectus
43
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
supplements, as described below. On March 28, 2025, Welltower also filed with the SEC a registration statement in connection with its enhanced dividend reinvestment plan (“DRIP”) under which it may issue up to 15,000,000 shares of common stock. As of October 23, 2026, 15,000,000 shares of common stock remained available for issuance under the DRIP registration statement.
The first prospectus supplement filed in connection with the New Registration Statement related to the ATM Program (as defined below). On March 28, 2025, Welltower and Welltower OP entered into an equity distribution agreement with the sales agents, forward sellers and forward purchasers named therein relating to issuances, offers and sales from time to time of up to $7,500,000,000 aggregate amount of common stock of Welltower (together with the existing master forward sale confirmations relating thereto, the “ATM Program”). The ATM Program also allows Welltower to enter into forward sale agreements. On October 28, 2025, Welltower and Welltower OP entered into a new equity distribution agreement with the sales agents, forward sellers and forward purchasers described above, which renewed the ATM Program on substantially similar terms and, in connection therewith, terminated the March 2025 equity distribution agreement. On July 28, 2026, Welltower and Welltower OP entered into a new equity distribution agreement with the sales agents, forward sellers and forward purchasers named therein, which renewed the ATM Program on substantially similar terms and, in connection therewith, terminated the October 2025 equity distribution agreement. As of October 23, 2026, we had $4,491,897,000 of remaining capacity under the ATM Program and there were no outstanding forward sale agreements. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured revolving credit facility and commercial paper programs.
The second such prospectus supplement continued an offering that was previously covered by a prior registration statement relating to the registration and possible issuance of up to 23,471,419 shares of common stock of Welltower Inc. (the “Exchangeable Shares”) that may, under certain circumstances, be issuable upon exchange of the 2.750% exchangeable senior notes due 2028 or 3.125% exchangeable senior notes due 2029 of Welltower OP, and the resale from time to time by the recipients of such Exchangeable Shares.
The third prospectus supplement filed in connection with the New Registration Statement continued an offering that was previously covered by a prior registration statement relating to the registration and possible issuance of up to 390,590 shares of common stock of Welltower Inc. (the “DownREIT Shares”) that may be issued from time to time if, and to the extent that, certain holders of Class A units (the “DownREIT Units”) of HCN G&L DownREIT II LLC, a Delaware limited liability company (the “DownREIT”), tender such DownREIT Units for redemption by the DownREIT, and HCN DownREIT Member, LLC, a majority-owned indirect subsidiary of the Company (including its permitted successors and assigns, the “Managing Member”), or a designated affiliate of the Managing Member, elects to assume the redemption obligations of the DownREIT and to satisfy all or a portion of the redemption consideration by issuing DownREIT Shares to the holders instead of or in addition to paying a cash amount.
The fourth such prospectus supplement continued an offering that was previously covered by a prior registration statement relating to the registration and possible issuance of up to 238,868 shares of common stock of Welltower Inc. that may be issued from time to time if, and to the extent that, certain holders of Class A Common Units (the “OP Units”) of Welltower OP tender the OP Units for redemption by Welltower OP, and Welltower Inc. elects to assume the redemption obligations of Welltower OP and to satisfy all or a portion of the redemption consideration by issuing shares of its common stock to the holders instead of or in addition to paying a cash amount.
The fifth such prospectus supplement registered the offer and resale by the selling stockholder identified therein of up to 1,563,904 shares of common stock of Welltower Inc., which Welltower issued as consideration for its recent acquisition of certain properties.
On July 29, 2025 and October 28, 2025, Welltower filed prospectus supplements with the SEC to register the offer and resale by the selling stockholders identified therein of an aggregate of up to 1,385,517 shares of common stock of Welltower Inc., which Welltower issued as consideration for its recent acquisitions of certain properties.
On October 28, 2025, Welltower filed a prospectus supplement with the SEC relating to the registration and possible issuance of up to 4,542,926 shares of common stock of Welltower Inc. that may be issued from time to time if, and to the extent that, certain holders of the OP Units tender their OP Units for redemption by Welltower OP, and Welltower Inc. elects to assume the redemption obligations of Welltower OP and to satisfy all or a portion of the redemption consideration by issuing shares of its common stock to the holders instead of or in addition to paying a cash amount.
On April 28, 2026, Welltower filed a prospectus supplement with the SEC relating to the registration and possible issuance of up to 176,172 shares of common stock of Welltower Inc. that may be issued from time to time if, and to the extent that, certain holders of the OP Units tender their OP Units for redemption by Welltower OP, and Welltower Inc. elects to assume the redemption obligations of Welltower OP and to satisfy all or a portion of the redemption consideration by issuing shares of its common stock to the holders instead of or in addition to paying a cash amount.
44
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
On April 28, 2026, Welltower filed a prospectus supplement with the SEC to register the offer and resale by the selling stockholder identified therein of up to 138,740 shares of common stock of Welltower Inc., which Welltower issued as consideration for its recent acquisition of certain properties.
On July 28, 2026, Welltower filed a prospectus supplement with the SEC to register the offer and resale by the selling stockholders identified therein of up to 261,753 shares of common stock of Welltower Inc., which Welltower issued as consideration for its recent lease amendment relating to certain properties.
Supplemental Guarantor Information
Welltower OP has issued the unsecured notes described in Note 11 to our unaudited consolidated financial statements, with the exception of the C$300,000,000 of 2.95% senior unsecured notes due 2027, which have been issued through private placement by a wholly owned subsidiary of Welltower OP. All unsecured notes issued by Welltower OP are fully and unconditionally guaranteed by Welltower and the C$300,000,000 of 2.95% senior unsecured notes due 2027 are fully and unconditionally guaranteed by Welltower OP. Welltower OP is 98.168% owned by Welltower as of September 30, 2026. In March 2020, the SEC adopted amendments, effective January 4, 2021 to the financial disclosure requirements applicable to registered debt offerings that include certain credit enhancements. We have adopted these new rules, which permits subsidiary issuers of obligations guaranteed by the parent to omit separate financial statements if the consolidated financial statements of the parent company have been filed, the subsidiary obligor is a consolidated subsidiary of the parent company, the guaranteed security is debt or debt-like and the security is guaranteed fully and unconditionally by the parent. Accordingly, separate consolidated financial statements of Welltower OP have not been presented. Furthermore, Welltower and Welltower OP have no material assets, liabilities or operations, other than financing activities and their investments in non-guarantor subsidiaries. Therefore, we meet the criteria in Rule 13-01 of Regulation S-X to omit the summarized financial information from our disclosures.
Results of Operations
Summary
Our primary sources of revenue include resident fees and services revenue, rental income, interest income and interest earned on short-term deposits. Our primary expenses include property operating expenses, depreciation and amortization, interest expense, general and administrative expenses and other expenses. We evaluate our business and make resource allocations on our three business segments: Seniors Housing Operating, Triple-net and Outpatient Medical. The primary performance measures for our properties are NOI and same store NOI (“SSNOI”) and other supplemental measures include FFO and EBITDA, which are further discussed below. Please see Non-GAAP Financial Measures for additional information and reconciliations related to these supplemental measures (in thousands, except per share data).
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Amount | % | 2026 | 2025 | Amount | % | |||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 414,823 | $ | 282,186 | $ | 132,637 | 47 | % | $ | 1,630,122 | $ | 844,070 | $ | 786,052 | 93 | % | ||||||||||||||||||||||||||||||||||
| NICS | 396,587 | 280,559 | 116,028 | 41 | % | 1,570,261 | 840,404 | 729,857 | 87 | % | ||||||||||||||||||||||||||||||||||||||||
| FFO | 1,070,791 | 824,375 | 246,416 | 30 | % | 3,206,992 | 2,415,289 | 791,703 | 33 | % | ||||||||||||||||||||||||||||||||||||||||
| EBITDA | 1,321,380 | 956,385 | 364,995 | 38 | % | 4,221,478 | 2,780,827 | 1,440,651 | 52 | % | ||||||||||||||||||||||||||||||||||||||||
| NOI | 1,469,751 | 1,108,644 | 361,107 | 33 | % | 4,160,720 | 3,102,874 | 1,057,846 | 34 | % | ||||||||||||||||||||||||||||||||||||||||
| SSNOI | 824,371 | 705,517 | 118,854 | 17 | % | 2,156,600 | 1,853,298 | 303,302 | 16 | % | ||||||||||||||||||||||||||||||||||||||||
| Per share data (fully diluted): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| NICS | $ | 0.54 | $ | 0.41 | $ | 0.13 | 32 | % | $ | 2.16 | $ | 1.26 | $ | 0.90 | 71 | % | ||||||||||||||||||||||||||||||||||
| FFO | $ | 1.42 | $ | 1.20 | $ | 0.22 | 18 | % | $ | 4.33 | $ | 3.61 | $ | 0.72 | 20 | % | ||||||||||||||||||||||||||||||||||
| Interest coverage ratio | 7.07 | x | 6.21 | x | 0.86 | x | 14 | % | 7.63 | x | 6.36 | x | 1.27 | x | 20 | % | ||||||||||||||||||||||||||||||||||
| Fixed charge coverage ratio | 6.40 | x | 5.60 | x | 0.80 | x | 14 | % | 6.92 | x | 5.73 | x | 1.19 | x | 21 | % | ||||||||||||||||||||||||||||||||||
During the quarter ended September 30, 2026, we reclassified asset management services related to Seniors Housing Fund I LP (the “Fund”) to Non-segment/Corporate from the Seniors Housing Operating segment to better align with the manner in which the CODM reviews results. Accordingly, the segment information provided in this section and the Non-GAAP Financial Measures section have been updated to conform to the current presentation for all periods presented.
45
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Seniors Housing Operating
The following is a summary of our results of operations for the Seniors Housing Operating segment (in thousands):
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Resident fees and services | $ | 3,121,141 | $ | 2,061,370 | $ | 1,059,771 | 51 | % | $ | 8,886,963 | $ | 5,896,944 | $ | 2,990,019 | 51 | % | ||||||||||||||||||||||||||||||||||
| Other income | 3,960 | 2,248 | 1,712 | 76 | % | 10,052 | 7,160 | 2,892 | 40 | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenues | 3,125,101 | 2,063,618 | 1,061,483 | 51 | % | 8,897,015 | 5,904,104 | 2,992,911 | 51 | % | ||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 2,227,359 | 1,499,215 | 728,144 | 49 | % | 6,370,829 | 4,322,176 | 2,048,653 | 47 | % | ||||||||||||||||||||||||||||||||||||||||
NOI (1) | 897,742 | 564,403 | 333,339 | 59 | % | 2,526,186 | 1,581,928 | 944,258 | 60 | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 588,135 | 368,523 | 219,612 | 60 | % | 1,729,938 | 1,063,660 | 666,278 | 63 | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | 34,570 | 22,672 | 11,898 | 52 | % | 100,888 | 58,522 | 42,366 | 72 | % | ||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 1,775 | — | 1,775 | n/a | 1,962 | 6,156 | (4,194) | (68) | % | |||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | 24,557 | 3,081 | 21,476 | 697 | % | 51,738 | 36,922 | 14,816 | 40 | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses | 116,893 | 38,673 | 78,220 | 202 | % | 220,452 | 65,797 | 154,655 | 235 | % | ||||||||||||||||||||||||||||||||||||||||
| 765,930 | 432,949 | 332,981 | 77 | % | 2,104,978 | 1,231,057 | 873,921 | 71 | % | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 131,812 | 131,454 | 358 | — | % | 421,208 | 350,871 | 70,337 | 20 | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | (39,588) | (15,485) | (24,103) | (156) | % | (79,806) | (24,270) | (55,536) | (229) | % | ||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | 48,685 | (1,313) | 49,998 | n/a | 42,832 | 50,725 | (7,893) | (16) | % | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | 140,909 | 114,656 | 26,253 | 23 | % | 384,234 | 377,326 | 6,908 | 2 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 140,909 | 114,656 | 26,253 | 23 | % | 384,234 | 377,326 | 6,908 | 2 | % | ||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | (1,485) | (1,099) | (386) | (35) | % | (5,122) | (1,698) | (3,424) | (202) | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 142,394 | $ | 115,755 | $ | 26,639 | 23 | % | $ | 389,356 | $ | 379,024 | $ | 10,332 | 3 | % | ||||||||||||||||||||||||||||||||||
(1) See “Non-GAAP Financial Measures” below for additional information and reconciliations. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Resident fees and services revenue and property operating expenses increased for the three and nine month periods ended September 30, 2026 compared to the same periods in the prior year primarily due to acquisitions, including the acquisitions of Amica Senior Lifestyles, Barchester Healthcare and HC-One Group as described in Note 3 to our consolidated financial statements. Additionally, our Seniors Housing Operating revenues are dependent on occupancy and rate growth, both of which have continued to steadily increase from the same periods in the prior year. Average occupancy is as follows:
Three Months Ended(1) | ||||||||||||||||||||||||||
| March 31, | June 30, | September 30, | December 31, | |||||||||||||||||||||||
| 2025 | 85.1 | % | 85.7 | % | 86.8 | % | 87.5 | % | ||||||||||||||||||
| 2026 | 87.3 | % | 87.6 | % | 88.3 | % | ||||||||||||||||||||
(1) Average occupancy includes our minority ownership share related to unconsolidated properties and excludes the minority partners’ noncontrolling ownership share related to consolidated properties. Also excludes land parcels, properties under development/redevelopment, leased properties, sold properties and non-operational properties.
The following is a summary of our SSNOI at Welltower’s share for the Seniors Housing Operating segment (in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI (1) | $ | 599,339 | $ | 497,212 | $ | 102,127 | 20.5 | % | $ | 1,584,881 | $ | 1,319,978 | $ | 264,903 | 20.1 | % | ||||||||||||||||||||||||||||||||||
(1) For the QTD Pool and YTD Pool, amounts relate to 1,052 and 884 same store properties. Please see “Non-GAAP Financial Measures” below for additional information and reconciliations.
46
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Depreciation and amortization expense fluctuates as a result of acquisitions, dispositions and segment transitions. To the extent that we acquire, develop or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.
During the nine months ended September 30, 2026, we recorded impairment charges of $51,738,000 related to 17 properties. During the nine months ended September 30, 2025, we recorded impairment charges of $36,922,000 related to nine properties.
Transaction costs related to asset acquisitions are capitalized as a component of the purchase price. The fluctuation in other expenses is primarily due to the timing of noncapitalizable transaction costs associated with acquisitions and operator transitions and costs associated with restructuring of investments, including related to the HC-One Group operator restructuring.
Changes in the gain on sales of properties are related to the volume and timing of property sales and the sales prices, which are further discussed in Note 5 to our unaudited consolidated financial statements.
During the nine months ended September 30, 2026, we completed construction conversions representing $512,518,000 or $430,326 per unit. The following is a summary of our consolidated Seniors Housing Operating construction projects in process, excluding expansions, overhead and capitalized interest (dollars in thousands):
| As of September 30, 2026 | ||||||||||||||||||||||||||
Expected Conversion Year(1) | Properties | Units/Beds | Anticipated Remaining Funding | Construction in Progress Balance | ||||||||||||||||||||||
| 2026 | 6 | 537 | $ | 33,155 | $ | 131,598 | ||||||||||||||||||||
| 2027 | 13 | 1,844 | 224,652 | 439,594 | ||||||||||||||||||||||
| 2028 | 21 | 1,741 | 444,071 | 297,393 | ||||||||||||||||||||||
TBD(2) | 12 | 321,747 | ||||||||||||||||||||||||
| Total | 52 | $ | 1,190,332 | |||||||||||||||||||||||
(1) Properties expected to be converted in phases over multiple years are reflected in the last expected year. | ||||||||||||||||||||||||||
(2) Represents projects for which a final budget or expected conversion date is not yet known. | ||||||||||||||||||||||||||
Interest expense represents secured debt interest expense, which fluctuates based on the net effect and timing of issuances, assumptions, fluctuations in foreign currency rates, extinguishments and principal amortizations. Additionally, interest expense includes financing lease interest expense, which has increased during the nine months ended September 30, 2026 as a result of the HC-One Group acquisition in the fourth quarter of 2025, as well as interest expense associated with failed sale leaseback obligations acquired in the fourth quarter of 2025. The fluctuations in loss (gain) on extinguishment of debt are primarily attributable to the volume of extinguishments and terms of the related secured debt.
The following is a summary of our Seniors Housing Operating segment property secured debt principal activity (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | 2,866,960 | $ | 2,286,113 | $ | 2,244,735 | $ | 2,042,583 | ||||||||||||||||||
| Debt issued | 8,500 | — | 332,884 | — | ||||||||||||||||||||||
| Debt assumed | 148,123 | — | 556,755 | 469,130 | ||||||||||||||||||||||
| Debt extinguished | (107,971) | (2,038) | (141,259) | (250,336) | ||||||||||||||||||||||
| Principal payments | (17,512) | (14,387) | (49,891) | (40,754) | ||||||||||||||||||||||
| Effect of foreign currency | 297 | (19,236) | (44,827) | 29,829 | ||||||||||||||||||||||
| Ending balance | $ | 2,898,397 | $ | 2,250,452 | $ | 2,898,397 | $ | 2,250,452 | ||||||||||||||||||
| Ending weighted average interest rate | 4.18 | % | 4.18 | % | 4.18 | % | 4.18 | % | ||||||||||||||||||
A portion of our Seniors Housing Operating property investments are formed through partnership interests. Income (loss) from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The fluctuations in income (loss) from unconsolidated entities during the three and nine months ended September 30, 2026 are primarily related to hypothetical liquidation at book value (“HLBV”) adjustments. Net income attributable to noncontrolling interests represents our partners’ share of net income (loss) related to joint ventures.
47
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Triple-net
The following is a summary of our results of operations for the Triple-net segment (in thousands):
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 451,901 | $ | 286,353 | $ | 165,548 | 58 | % | $ | 1,250,493 | $ | 812,435 | $ | 438,058 | 54 | % | ||||||||||||||||||||||||||||||||||
| Interest income | — | — | — | n/a | 8,077 | 2,111 | 5,966 | 283 | % | |||||||||||||||||||||||||||||||||||||||||
| Other income | 172 | 284 | (112) | (39) | % | 456 | 875 | (419) | (48) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenues | 452,073 | 286,637 | 165,436 | 58 | % | 1,259,026 | 815,421 | 443,605 | 54 | % | ||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 6,206 | 8,227 | (2,021) | (25) | % | 21,355 | 25,697 | (4,342) | (17) | % | ||||||||||||||||||||||||||||||||||||||||
NOI(1) | 445,867 | 278,410 | 167,457 | 60 | % | 1,237,671 | 789,724 | 447,947 | 57 | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 107,367 | 72,614 | 34,753 | 48 | % | 303,938 | 223,473 | 80,465 | 36 | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | 4,172 | 3,977 | 195 | 5 | % | 12,276 | 11,977 | 299 | 2 | % | ||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | 1,646 | — | 1,646 | n/a | 4,422 | 38,437 | (34,015) | (88) | % | |||||||||||||||||||||||||||||||||||||||||
| Other expenses | 966 | 3,731 | (2,765) | (74) | % | 1,780 | 4,741 | (2,961) | (62) | % | ||||||||||||||||||||||||||||||||||||||||
| 114,151 | 80,322 | 33,829 | 42 | % | 322,416 | 278,628 | 43,788 | 16 | % | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 331,716 | 198,088 | 133,628 | 67 | % | 915,255 | 511,096 | 404,159 | 79 | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 2,837 | (394) | 3,231 | 820 | % | 12,829 | (1,543) | 14,372 | 931 | % | ||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | (321) | 5,341 | (5,662) | (106) | % | (4,346) | (1,703) | (2,643) | (155) | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | 334,232 | 203,035 | 131,197 | 65 | % | 923,738 | 507,850 | 415,888 | 82 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 334,232 | 203,035 | 131,197 | 65 | % | 923,738 | 507,850 | 415,888 | 82 | % | ||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 359 | 1,205 | (846) | (70) | % | 3,335 | 572 | 2,763 | 483 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 333,873 | $ | 201,830 | $ | 132,043 | 65 | % | $ | 920,403 | $ | 507,278 | $ | 413,125 | 81 | % | ||||||||||||||||||||||||||||||||||
(1) See “Non-GAAP Financial Measures” below for additional information and reconciliations. | ||||||||||||||||||||||||||||||||||||||||||||||||||
The increase in rental income for the three and nine months ended September 30, 2026 is primarily attributable to acquisitions completed during 2025 and 2026, including the acquisitions described in Note 3, and annual rent increases. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the applicable period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase. During the nine months ended September 30, 2026, our Triple-net portfolio had 39 leases with rental rate increases and a weighted average increase of 5.5%.
Interest income is primarily related to leases that were classified as sales-type leases.
The following is a summary of our SSNOI at Welltower’s share for the Triple-net segment (in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI(1) | $ | 196,543 | $ | 180,461 | $ | 16,082 | 8.9 | % | $ | 499,494 | $ | 462,602 | $ | 36,892 | 8.0 | % | ||||||||||||||||||||||||||||||||||
(1) For the QTD Pool and YTD Pool, amounts relate to 479 and 410 same store properties. Please see “Non-GAAP Financial Measures” below for additional information and reconciliations.
Depreciation and amortization expense fluctuates as a result of the acquisitions and dispositions of Triple-net properties. To the extent we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.
During the nine months ended September 30, 2026, we recorded impairment charges of $4,422,000 related to two properties. During the nine months ended September 30, 2025, we recorded impairment charges of $38,437,000 related to six properties.
48
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Transaction costs related to asset acquisitions are capitalized as a component of purchase price. The fluctuation in other expenses is primarily due to noncapitalizable transaction costs from acquisitions and segment transitions.
Changes in the gain (loss) on real estate dispositions and acquisitions of controlling interests, net were related to the volume, timing and price of related transactions.
Interest expense represents secured debt interest expense and related fees. The change in secured debt interest expense is due to the net effect and timing of principal amortizations. The following is a summary of our Triple-net secured debt principal activity for the periods presented (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | 324,649 | $ | 331,979 | $ | 328,345 | $ | 335,552 | ||||||||||||||||||
| Principal payments | (1,872) | (1,809) | (5,568) | (5,382) | ||||||||||||||||||||||
| Ending balance | $ | 322,777 | $ | 330,170 | $ | 322,777 | $ | 330,170 | ||||||||||||||||||
| Ending weighted average interest rate | 3.44 | % | 3.44 | % | 3.44 | % | 3.44 | % | ||||||||||||||||||
A portion of our Triple-net property investments were formed through partnerships. Income (loss) from unconsolidated entities represents our share of net income or losses from partnerships where we are the noncontrolling partner. The fluctuation in income (loss) from unconsolidated entities during the three and nine months ended September 30, 2026 is primarily related to HLBV adjustments. Net income attributable to noncontrolling interests represents our partners’ share of net income relating to those partnerships where we are the controlling partner.
Outpatient Medical
The following is a summary of our results of operations for the Outpatient Medical segment for the periods presented (in thousands):
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 36,740 | $ | 213,122 | $ | (176,382) | (83) | % | $ | 151,730 | $ | 631,647 | $ | (479,917) | (76) | % | ||||||||||||||||||||||||||||||||||
| Other income | 811 | 2,050 | (1,239) | (60) | % | 2,721 | 6,352 | (3,631) | (57) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenues | 37,551 | 215,172 | (177,621) | (83) | % | 154,451 | 637,999 | (483,548) | (76) | % | ||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 4,947 | 63,319 | (58,372) | (92) | % | 30,514 | 190,759 | (160,245) | (84) | % | ||||||||||||||||||||||||||||||||||||||||
NOI(1) | 32,604 | 151,853 | (119,249) | (79) | % | 123,937 | 447,240 | (323,303) | (72) | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 11,284 | 68,675 | (57,391) | (84) | % | 33,426 | 203,584 | (170,158) | (84) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | 288 | 771 | (483) | (63) | % | 624 | 369 | 255 | 69 | % | ||||||||||||||||||||||||||||||||||||||||
| Impairment of assets | 7,249 | — | 7,249 | n/a | 7,892 | — | 7,892 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 425 | 151 | 274 | 181 | % | 4,394 | 208 | 4,186 | n/a | |||||||||||||||||||||||||||||||||||||||||
| 19,246 | 69,597 | (50,351) | (72) | % | 46,336 | 204,161 | (157,825) | (77) | % | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | 13,358 | 82,256 | (68,898) | (84) | % | 77,601 | 243,079 | (165,478) | (68) | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 261 | 622 | (361) | (58) | % | (2,505) | (1,263) | (1,242) | (98) | % | ||||||||||||||||||||||||||||||||||||||||
| Gain (loss) on real estate dispositions and acquisitions of controlling interests, net | 66,314 | (3) | 66,317 | n/a | 595,129 | 21,630 | 573,499 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | 79,933 | 82,875 | (2,942) | (4) | % | 670,225 | 263,446 | 406,779 | 154 | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 79,933 | 82,875 | (2,942) | (4) | % | 670,225 | 263,446 | 406,779 | 154 | % | ||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 11,945 | 716 | 11,229 | n/a | 32,749 | 2,266 | 30,483 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 67,988 | $ | 82,159 | $ | (14,171) | (17) | % | $ | 637,476 | $ | 261,180 | $ | 376,296 | 144 | % | ||||||||||||||||||||||||||||||||||
(1) See “Non-GAAP Financial Measures” below for additional information and reconciliations. | ||||||||||||||||||||||||||||||||||||||||||||||||||
On August 14, 2025, we entered into a definitive agreement to sell a portfolio of 319 consolidated and unconsolidated Outpatient Medical properties for approximately $7.2 billion. The disposition has and will continue to occur in tranches expected to close through 2026. During the nine months ended September 30, 2026, we disposed of 74 properties related to the
49
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
definitive agreement, with an aggregate gain on real estate dispositions of $591,031,000. Through September 30, 2026, we have disposed of 315 properties related to the definitive agreement.
For the quarter ended September 30, 2026, rental income, property operating expenses and depreciation expenses decreased primarily due to the properties sold during the fourth quarter of 2025 and throughout 2026.
The following is a summary of our SSNOI at Welltower’s share for the Outpatient Medical segment (in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
SSNOI (1) | $ | 28,489 | $ | 27,844 | $ | 645 | 2.3 | % | $ | 72,225 | $ | 70,718 | $ | 1,507 | 2.1 | % | ||||||||||||||||||||||||||||||||||
(1) For the QTD Pool and YTD Pool, amounts relate to 91 and 86 same store properties. Please see “Non-GAAP Financial Measures” below for additional information and reconciliations.
During the nine months ended September 30, 2026, we recorded impairment charges of $7,892,000 related to six properties.
The following table is a summary of secured debt principal activity for the periods presented (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Beginning balance | $ | — | $ | 49,870 | $ | — | $ | 89,088 | ||||||||||||||||||
| Debt extinguished | — | — | — | (38,156) | ||||||||||||||||||||||
| Principal payments | — | (511) | — | (1,573) | ||||||||||||||||||||||
| Ending balance | $ | — | $ | 49,359 | $ | — | $ | 49,359 | ||||||||||||||||||
| Ending weighted average interest rate | — | % | 4.49 | % | — | % | 4.49 | % | ||||||||||||||||||
Due to the transaction noted above, the Outpatient Medical segment no longer has any outstanding secured debt.
A portion of our Outpatient Medical property investments were formed through partnerships. The increase in net income (loss) from noncontrolling interests is primarily related to our partners’ share of the gains on real property dispositions recognized as part of the sale of Outpatient Medical properties during the nine months ended September 30, 2026.
50
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Non-segment/Corporate
The following is a summary of our results of operations for the Non-segment/Corporate activities for the periods presented (in thousands):
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 83,251 | $ | 67,216 | $ | 16,035 | 24 | % | $ | 223,472 | $ | 189,652 | $ | 33,820 | 18 | % | ||||||||||||||||||||||||||||||||||
| Other income | 17,801 | 53,049 | (35,248) | (66) | % | 78,325 | 109,847 | (31,522) | (29) | % | ||||||||||||||||||||||||||||||||||||||||
| Total revenues | 101,052 | 120,265 | (19,213) | (16) | % | 301,797 | 299,499 | 2,298 | 1 | % | ||||||||||||||||||||||||||||||||||||||||
| Property operating expenses | 7,514 | 6,287 | 1,227 | 20 | % | 28,871 | 15,517 | 13,354 | 86 | % | ||||||||||||||||||||||||||||||||||||||||
NOI(1) | 93,538 | 113,978 | (20,440) | (18) | % | 272,926 | 283,982 | (11,056) | (4) | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 153,625 | 134,632 | 18,993 | 14 | % | 453,496 | 377,303 | 76,193 | 20 | % | ||||||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 67,169 | 63,124 | 4,045 | 6 | % | 202,129 | 191,057 | 11,072 | 6 | % | ||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | 31,682 | (31,682) | (100) | % | — | 28,063 | (28,063) | (100) | % | ||||||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 5,047 | — | 5,047 | n/a | 7,571 | — | 7,571 | n/a | ||||||||||||||||||||||||||||||||||||||||||
| Provision for loan losses, net | 230 | 1,088 | (858) | (79) | % | 4,045 | (2,032) | 6,077 | 299 | % | ||||||||||||||||||||||||||||||||||||||||
| Other expenses | 6,403 | 2,144 | 4,259 | 199 | % | 16,128 | 4,611 | 11,517 | 250 | % | ||||||||||||||||||||||||||||||||||||||||
| 232,474 | 232,670 | (196) | — | % | 683,369 | 599,002 | 84,367 | 14 | % | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes and other items | (138,936) | (118,692) | (20,244) | (17) | % | (410,443) | (315,020) | (95,423) | (30) | % | ||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | (7,116) | (2,335) | (4,781) | (205) | % | 43,230 | 2,131 | 41,099 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Income (loss) from unconsolidated entities | 5,801 | 2,647 | 3,154 | 119 | % | 19,138 | 8,337 | 10,801 | 130 | % | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | (140,251) | (118,380) | (21,871) | (18) | % | (348,075) | (304,552) | (43,523) | (14) | % | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | (140,251) | (118,380) | (21,871) | (18) | % | (348,075) | (304,552) | (43,523) | (14) | % | ||||||||||||||||||||||||||||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests | 7,417 | 805 | 6,612 | 821 | % | 28,899 | 2,526 | 26,373 | n/a | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (147,668) | $ | (119,185) | $ | (28,483) | (24) | % | $ | (376,974) | $ | (307,078) | $ | (69,896) | (23) | % | ||||||||||||||||||||||||||||||||||
(1) See “Non-GAAP Financial Measures” below for additional information and reconciliations. | ||||||||||||||||||||||||||||||||||||||||||||||||||
The increase in interest income for both the three and nine months ended September 30, 2026 is primarily driven by increased advances on loans receivable. The fluctuation in provision for loan losses, net is related to adjustments to reserves for loan losses based upon our current assessment of expected credit losses in the portfolio. Please refer to Note 7 to our unaudited consolidated financial statements for additional information.
Other income is primarily related to bank interest income earned on short-term deposits which will vary depending on the average carrying cash balance during the period, and asset management income related to the Fund and the Seniors Housing Debt Fund. Property operating expenses primarily represent insurance costs related to our captive insurance company, which acts as a direct insurer of property level insurance coverage for our portfolio.
The following is a summary of our Non-segment/Corporate interest expense for the periods presented (in thousands):
| Three Months Ended | Change | Nine Months Ended | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Senior unsecured notes | $ | 132,230 | $ | 129,056 | $ | 3,174 | 2 | % | $ | 413,581 | $ | 349,694 | $ | 63,887 | 18 | % | ||||||||||||||||||||||||||||||||||
| Unsecured credit facility and commercial paper programs | 9,139 | 1,573 | 7,566 | 481 | % | 13,333 | 6,594 | 6,739 | 102 | % | ||||||||||||||||||||||||||||||||||||||||
| Loan expense | 12,256 | 4,003 | 8,253 | 206 | % | 26,582 | 21,015 | 5,567 | 26 | % | ||||||||||||||||||||||||||||||||||||||||
| Totals | $ | 153,625 | $ | 134,632 | $ | 18,993 | 14 | % | $ | 453,496 | $ | 377,303 | $ | 76,193 | 20 | % | ||||||||||||||||||||||||||||||||||
The change in interest expense on senior unsecured notes is due to the net effect of issuances, exchanges and extinguishments, as well as the movement in foreign exchange rates and related hedge activity. Please refer to Note 11 to our unaudited consolidated financial statements for additional information. The change in interest expense on our unsecured
51
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
revolving credit facility and commercial paper programs is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 10 to our unaudited consolidated financial statements for additional information regarding our unsecured revolving credit facility and commercial paper programs. Loan expenses represent the amortization of costs incurred in connection with senior unsecured notes issuances.
Loss on extinguishment of debt, net for both the three and nine months ended September 30, 2026 was primarily attributable to charges incurred in connection with exchanges of our 2028 Exchangeable Notes.
General and administrative expenses as a percentage of consolidated revenues for the nine months ended September 30, 2026 and 2025 were 1.90% and 2.50%, respectively.
Loss (gain) on derivatives and financial instruments, net is primarily attributable to the mark-to-market of the equity warrants received as part of the HC-One Group transactions that closed in 2021 and 2023. These warrants were settled in conjunction with the HC-One Group acquisition. Please refer to Notes 3 and 12 for additional information related to the acquisition and related warrants.
Other expenses includes noncapitalizable legal expenses.
Income taxes reflected in the financial statements primarily consist of U.S. federal, state and local income taxes, as well as non-U.S. income-based and withholding taxes on certain investments located in jurisdictions outside the U.S. We determine interim income tax expense (benefit) by applying the applicable annual effective tax rates to the ordinary income (loss) of our TRS entities and recognizing the tax effects of discrete items in the periods in which they occur. The income tax benefit for the nine months ended September 30, 2026 included a $71,304,000 deferred tax benefit recognized by a Canadian subsidiary as a result of a reduction in its valuation allowance. The reduction in the valuation allowance was supported by net deferred tax liabilities acquired during the period.
The increase in income (loss) from unconsolidated entities is primarily due to activity related to the Seniors Housing Debt Fund. The fluctuation for net income (loss) attributable to noncontrolling interests will change based on the activity that occurs at Welltower OP and the current ownership of Welltower Inc. in Welltower OP.
Other
Non-GAAP Financial Measures
We believe that net income and net income attributable to common stockholders, as defined by U.S. GAAP, are the most appropriate earnings measurements. However, we consider FFO, NOI, SSNOI, EBITDA and Adjusted EBITDA to be useful supplemental measures of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created funds from operations attributable to common stockholders (“FFO”) as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means NICS, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and acquisitions of controlling interests, and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests.
NOI is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to managers, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent general overhead costs that are unrelated to property operations and unallocable to the properties. These expenses include, but are not limited to, payroll and benefits related to corporate employees, professional services, office expenses and depreciation of corporate fixed assets. Same store NOI (“SSNOI”) is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. We believe the drivers of property level NOI for both consolidated properties and unconsolidated properties are generally the same and therefore, we evaluate SSNOI based on our ownership interest in each property (“Welltower Share”). To arrive at Welltower Share, NOI is adjusted by adding our minority ownership share related to unconsolidated properties and by subtracting the minority partners’ noncontrolling ownership interests for consolidated properties. We do not control investments in unconsolidated properties and while we consider disclosures at Welltower Share to be useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in SSNOI five full quarters or seven full quarters after acquisition or being placed into service for the QTD Pool and YTD Pool, respectively. Land parcels,
52
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
loans and leased properties, as well as any properties sold or classified as held for sale during the respective periods are excluded from SSNOI. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from SSNOI until five full quarters or seven full quarters post completion of the redevelopment for the QTD Pool and YTD Pool, respectively. Properties undergoing operator transitions and/or segment transitions are also excluded from SSNOI until five full quarters or seven full quarters post completion of the transition for the QTD Pool and YTD Pool, respectively. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from SSNOI until five full quarters or seven full quarters after the properties are placed back into service for the QTD Pool and YTD Pool, respectively. SSNOI excludes non-cash NOI and includes adjustments to present consistent ownership percentages and to translate Canadian properties and U.K. properties using a consistent exchange rate. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our portfolio.
EBITDA is defined as earnings (net income) before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding unconsolidated entities and including adjustments for stock-based compensation expense, provision for loan losses, gains/losses on extinguishment of debt, gains/losses on disposition of properties and acquisitions of controlling interests, impairment of assets, gains/losses on derivatives and financial instruments, other expenses, other impairment charges and other adjustments as deemed appropriate. We believe that EBITDA and Adjusted EBITDA, along with net income, are important supplemental measures because they provide additional information to assess and evaluate the performance of our operations. We primarily use these measures to determine our interest coverage ratio, which represents EBITDA and Adjusted EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA and Adjusted EBITDA divided by fixed charges. Fixed charges include total interest and secured debt principal amortization. Covenants in our unsecured senior notes and primary credit facility contain financial ratios based on a definition of EBITDA and Adjusted EBITDA that is specific to those agreements. Our leverage ratios are defined as the proportion of net debt to total capitalization and include book capitalization, undepreciated book capitalization and enterprise value. Book capitalization represents the sum of net debt (defined as total long-term debt, excluding operating lease liabilities, less cash and cash equivalents and restricted cash), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Enterprise value represents book capitalization adjusted for the fair market value of our common stock.
Our supplemental reporting measures and similarly titled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, the Board of Directors utilizes these measures to evaluate management performance. None of our supplemental measures represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental measures, as defined by us, may not be comparable to similarly titled items reported by other real estate investment trusts or other companies.
The tables below reflect the reconciliation of FFO to NICS, the most directly comparable U.S. GAAP measure, for the periods presented. Noncontrolling interest and unconsolidated entity amounts represent adjustments to reflect our share of depreciation and amortization, gains/losses on real estate dispositions and acquisitions of controlling interests and impairment of assets. Amounts are in thousands except for per share data.
53
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| FFO Reconciliations: | 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 396,587 | $ | 445,002 | $ | 728,672 | $ | 96,441 | $ | 280,559 | $ | 301,888 | $ | 257,957 | ||||||||||||||||||||||||||||||
| Depreciation and amortization | 706,786 | 737,764 | 622,752 | 594,151 | 509,812 | 495,036 | 485,869 | |||||||||||||||||||||||||||||||||||||
| Impairment of assets | 33,452 | 25,774 | 4,826 | 45,924 | 3,081 | 19,876 | 52,402 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | (114,678) | (98,537) | (420,400) | (1,378,391) | (4,025) | (14,850) | (51,777) | |||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 9,884 | 10,639 | 17,100 | 11,940 | (9,360) | (6,256) | (9,468) | |||||||||||||||||||||||||||||||||||||
| Unconsolidated entities | 38,760 | 33,011 | 29,598 | 32,598 | 44,308 | 30,023 | 30,214 | |||||||||||||||||||||||||||||||||||||
| FFO | $ | 1,070,791 | $ | 1,153,653 | $ | 982,548 | $ | (597,337) | $ | 824,375 | $ | 825,717 | $ | 765,197 | ||||||||||||||||||||||||||||||
| Average diluted shares outstanding | ||||||||||||||||||||||||||||||||||||||||||||
| For net income attributable to common stockholders | 754,903 | 737,956 | 726,255 | 710,167 | 685,399 | 668,140 | 653,795 | |||||||||||||||||||||||||||||||||||||
| For FFO | 754,903 | 737,956 | 726,255 | 689,582 | 685,399 | 668,140 | 653,795 | |||||||||||||||||||||||||||||||||||||
| Per diluted share data: | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to common stockholders(1) | $ | 0.54 | $ | 0.61 | $ | 1.02 | $ | 0.14 | $ | 0.41 | $ | 0.45 | $ | 0.40 | ||||||||||||||||||||||||||||||
| FFO | $ | 1.42 | $ | 1.56 | $ | 1.35 | $ | (0.87) | $ | 1.20 | $ | 1.24 | $ | 1.17 | ||||||||||||||||||||||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| FFO Reconciliations: | 2026 | 2025 | ||||||||||||
| Net income (loss) attributable to common stockholders | $ | 1,570,261 | $ | 840,404 | ||||||||||
| Depreciation and amortization | 2,067,302 | 1,490,717 | ||||||||||||
| Impairment of assets | 64,052 | 75,359 | ||||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | (633,615) | (70,652) | ||||||||||||
| Noncontrolling interests | 37,623 | (25,084) | ||||||||||||
| Unconsolidated entities | 101,369 | 104,545 | ||||||||||||
| FFO | $ | 3,206,992 | $ | 2,415,289 | ||||||||||
| Average diluted common shares outstanding: | 739,794 | 669,218 | ||||||||||||
| Per diluted share data: | ||||||||||||||
Net income attributable to common stockholders(1) | $ | 2.16 | $ | 1.26 | ||||||||||
| FFO | $ | 4.33 | $ | 3.61 | ||||||||||
(1) Includes adjustment to the numerator for income (loss) attributable to OP unitholders. | ||||||||||||||
The tables below reflect the reconciliation of consolidated NOI to net income, the most directly comparable U.S. GAAP measure, for the periods presented (dollars in thousands):
54
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| NOI Reconciliations: | 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 414,823 | $ | 462,975 | $ | 752,324 | $ | 117,767 | $ | 282,186 | $ | 304,618 | $ | 257,266 | ||||||||||||||||||||||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | (114,678) | (98,537) | (420,400) | (1,378,391) | (4,025) | (14,850) | (51,777) | |||||||||||||||||||||||||||||||||||||
| Loss (income) from unconsolidated entities | 30,689 | 17,969 | 1,686 | (4,442) | 12,610 | 7,392 | (1,263) | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 7,116 | (61,979) | 11,633 | (4,985) | 2,335 | 1,053 | (5,519) | |||||||||||||||||||||||||||||||||||||
| Other expenses | 124,687 | 56,930 | 61,137 | 125,844 | 44,699 | 16,598 | 14,060 | |||||||||||||||||||||||||||||||||||||
| Impairment of assets | 33,452 | 25,774 | 4,826 | 45,924 | 3,081 | 19,876 | 52,402 | |||||||||||||||||||||||||||||||||||||
| Provision for loan losses, net | 230 | 2,183 | 1,632 | (7,384) | 1,088 | (1,113) | (2,007) | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 6,822 | 1,984 | 727 | 3,089 | — | — | 6,156 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | — | — | (5,656) | 31,682 | (409) | (3,210) | |||||||||||||||||||||||||||||||||||||
| General and administrative expenses | 67,169 | 67,486 | 67,474 | 1,557,378 | 63,124 | 64,175 | 63,758 | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 706,786 | 737,764 | 622,752 | 594,151 | 509,812 | 495,036 | 485,869 | |||||||||||||||||||||||||||||||||||||
| Interest expense | 192,655 | 181,914 | 192,715 | 203,784 | 162,052 | 141,157 | 144,962 | |||||||||||||||||||||||||||||||||||||
| Consolidated net operating income (NOI) | $ | 1,469,751 | $ | 1,394,463 | $ | 1,296,506 | $ | 1,247,079 | $ | 1,108,644 | $ | 1,033,533 | $ | 960,697 | ||||||||||||||||||||||||||||||
| NOI by segment: | ||||||||||||||||||||||||||||||||||||||||||||
| Seniors Housing Operating | $ | 897,742 | $ | 860,411 | $ | 768,033 | $ | 681,423 | $ | 564,403 | $ | 535,255 | $ | 482,270 | ||||||||||||||||||||||||||||||
| Triple-net | 445,867 | 407,498 | 384,306 | 374,089 | 278,410 | 265,102 | 246,212 | |||||||||||||||||||||||||||||||||||||
| Outpatient Medical | 32,604 | 38,034 | 53,299 | 101,459 | 151,853 | 148,977 | 146,410 | |||||||||||||||||||||||||||||||||||||
| Non-segment/Corporate | 93,538 | 88,520 | 90,868 | 90,108 | 113,978 | 84,199 | 85,805 | |||||||||||||||||||||||||||||||||||||
| Total NOI | $ | 1,469,751 | $ | 1,394,463 | $ | 1,296,506 | $ | 1,247,079 | $ | 1,108,644 | $ | 1,033,533 | $ | 960,697 | ||||||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| NOI Reconciliations: | 2026 | 2025 | ||||||||||||
| Net income (loss) | $ | 1,630,122 | $ | 844,070 | ||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | (633,615) | (70,652) | ||||||||||||
| Loss (income) from unconsolidated entities | 50,344 | 18,739 | ||||||||||||
| Income tax expense (benefit) | (43,230) | (2,131) | ||||||||||||
| Other expenses | 242,754 | 75,357 | ||||||||||||
| Impairment of assets | 64,052 | 75,359 | ||||||||||||
| Provision for loan losses, net | 4,045 | (2,032) | ||||||||||||
| Loss (gain) on extinguishment of debt, net | 9,533 | 6,156 | ||||||||||||
| Loss (gain) on derivatives and financial instruments, net | — | 28,063 | ||||||||||||
| General and administrative expenses | 202,129 | 191,057 | ||||||||||||
| Depreciation and amortization | 2,067,302 | 1,490,717 | ||||||||||||
| Interest expense | 567,284 | 448,171 | ||||||||||||
| Consolidated net operating income (NOI) | $ | 4,160,720 | $ | 3,102,874 | ||||||||||
| NOI by segment: | ||||||||||||||
| Seniors Housing Operating | $ | 2,526,186 | $ | 1,581,928 | ||||||||||
| Triple-net | 1,237,671 | 789,724 | ||||||||||||
| Outpatient Medical | 123,937 | 447,240 | ||||||||||||
| Non-segment/Corporate | 272,926 | 283,982 | ||||||||||||
| Total NOI | $ | 4,160,720 | $ | 3,102,874 | ||||||||||
55
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a reconciliation of the properties included in our QTD Pool and YTD Pool for SSNOI:
| QTD Pool | YTD Pool | |||||||||||||||||||||||||||||||||||||||||||||||||
| SSNOI Property Reconciliations: | Seniors Housing Operating | Triple-net | Outpatient Medical | Total | Seniors Housing Operating | Triple-net | Outpatient Medical | Total | ||||||||||||||||||||||||||||||||||||||||||
Consolidated properties | 1,902 | 865 | 51 | 2,818 | 1,902 | 865 | 51 | 2,818 | ||||||||||||||||||||||||||||||||||||||||||
Unconsolidated properties | 133 | — | 51 | 184 | 133 | — | 51 | 184 | ||||||||||||||||||||||||||||||||||||||||||
Total properties | 2,035 | 865 | 102 | 3,002 | 2,035 | 865 | 102 | 3,002 | ||||||||||||||||||||||||||||||||||||||||||
Recent acquisitions/development conversions(1) | (528) | (347) | (2) | (877) | (696) | (416) | (7) | (1,119) | ||||||||||||||||||||||||||||||||||||||||||
Under development | (46) | — | — | (46) | (46) | — | — | (46) | ||||||||||||||||||||||||||||||||||||||||||
Under redevelopment(2) | (2) | — | — | (2) | (2) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||
| Current held for sale | (22) | (32) | (4) | (58) | (22) | (32) | (4) | (58) | ||||||||||||||||||||||||||||||||||||||||||
| Land parcels, loans and leased properties | (168) | (4) | (5) | (177) | (168) | (4) | (5) | (177) | ||||||||||||||||||||||||||||||||||||||||||
Transitions(3) | (210) | (2) | — | (212) | (210) | (2) | — | (212) | ||||||||||||||||||||||||||||||||||||||||||
Other(4) | (7) | (1) | — | (8) | (7) | (1) | — | (8) | ||||||||||||||||||||||||||||||||||||||||||
Same store properties | 1,052 | 479 | 91 | 1,622 | 884 | 410 | 86 | 1,380 | ||||||||||||||||||||||||||||||||||||||||||
(1) Acquisitions and development conversions will enter the QTD Pool after five full quarters and YTD Pool after seven full quarters from acquisition or certificate of occupancy. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Redevelopment properties will enter the QTD Pool after five full quarters and YTD Pool after seven full quarters of operations post redevelopment completion. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Transitioned properties will enter the QTD Pool after five full quarters and YTD Pool after seven full quarters of operations with the new operator in place or under the new structure. | ||||||||||||||||||||||||||||||||||||||||||||||||||
(4) Represents properties that are either closed or being closed. | ||||||||||||||||||||||||||||||||||||||||||||||||||
56
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following is a reconciliation of our consolidated NOI to same store NOI for the periods presented for the QTD Pool and YTD Pool (dollars in thousands):
| QTD Pool | YTD Pool | |||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||||
| SSNOI Reconciliations: | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Seniors Housing Operating: | ||||||||||||||||||||||||||
| Consolidated NOI | $ | 897,742 | $ | 564,403 | $ | 2,526,186 | $ | 1,581,928 | ||||||||||||||||||
| NOI attributable to unconsolidated investments | 22,579 | 21,553 | 63,702 | 60,480 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (16,064) | (12,894) | (45,618) | (38,705) | ||||||||||||||||||||||
| NOI on non-properties | 4,550 | (638) | 8,389 | 1,232 | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (308,284) | (70,343) | (961,637) | (283,773) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (862) | (2,132) | (3,506) | (8,011) | ||||||||||||||||||||||
Currency and ownership adjustments(1) | (322) | (2,737) | (2,635) | 6,827 | ||||||||||||||||||||||
| SSNOI at Welltower Share | 599,339 | 497,212 | 1,584,881 | 1,319,978 | ||||||||||||||||||||||
| Triple-net: | ||||||||||||||||||||||||||
| Consolidated NOI | 445,867 | 278,410 | 1,237,671 | 789,724 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (1,009) | (2,546) | (3,076) | (9,953) | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (205,784) | (60,027) | (649,776) | (243,457) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (42,215) | (35,793) | (84,495) | (79,537) | ||||||||||||||||||||||
Currency and ownership adjustments(1) | (316) | 417 | (830) | 5,825 | ||||||||||||||||||||||
| SSNOI at Welltower Share | 196,543 | 180,461 | 499,494 | 462,602 | ||||||||||||||||||||||
| Outpatient Medical: | ||||||||||||||||||||||||||
| Consolidated NOI | 32,604 | 151,853 | 123,937 | 447,240 | ||||||||||||||||||||||
| NOI attributable to unconsolidated investments | 4,217 | 4,228 | 12,924 | 12,432 | ||||||||||||||||||||||
| NOI attributable to noncontrolling interests | (799) | (2,694) | (2,984) | (7,875) | ||||||||||||||||||||||
| NOI attributable to non-same store properties | (4,373) | (121,722) | (54,780) | (372,847) | ||||||||||||||||||||||
| Non-cash NOI attributable to same store properties | (3,160) | (3,821) | (6,872) | (8,232) | ||||||||||||||||||||||
| SSNOI at Welltower Share | 28,489 | 27,844 | 72,225 | 70,718 | ||||||||||||||||||||||
| SSNOI at Welltower Share: | ||||||||||||||||||||||||||
| Seniors Housing Operating | 599,339 | 497,212 | 1,584,881 | 1,319,978 | ||||||||||||||||||||||
| Triple-net | 196,543 | 180,461 | 499,494 | 462,602 | ||||||||||||||||||||||
| Outpatient Medical | 28,489 | 27,844 | 72,225 | 70,718 | ||||||||||||||||||||||
| Total | $ | 824,371 | $ | 705,517 | $ | 2,156,600 | $ | 1,853,298 | ||||||||||||||||||
(1) Includes adjustments to reflect consistent property ownership percentages, to translate Canadian properties at a USD/CAD rate of 1.43 and to translate U.K. properties at a GBP/USD rate of 1.23. | ||||||||||||||||||||||||||
57
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The tables below reflect the reconciliation of EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented (dollars in thousands):
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||||||||||||||||||||||||||||
| EBITDA Reconciliations: | 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 414,823 | $ | 462,975 | $ | 752,324 | $ | 117,767 | $ | 282,186 | $ | 304,618 | $ | 257,266 | |||||||||||||||||||||||||||||||||
| Interest expense | 192,655 | 181,914 | 192,715 | 203,784 | 162,052 | 141,157 | 144,962 | ||||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 7,116 | (61,979) | 11,633 | (4,985) | 2,335 | 1,053 | (5,519) | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 706,786 | 737,764 | 622,752 | 594,151 | 509,812 | 495,036 | 485,869 | ||||||||||||||||||||||||||||||||||||||||
| EBITDA | $ | 1,321,380 | $ | 1,320,674 | $ | 1,579,424 | $ | 910,717 | $ | 956,385 | $ | 941,864 | $ | 882,578 | |||||||||||||||||||||||||||||||||
| Interest Coverage Ratio: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | $ | 192,655 | $ | 181,914 | $ | 192,715 | $ | 203,784 | $ | 162,052 | $ | 141,157 | $ | 144,962 | |||||||||||||||||||||||||||||||||
| Capitalized interest | 12,706 | 8,851 | 8,449 | 7,476 | 6,150 | 8,653 | 11,520 | ||||||||||||||||||||||||||||||||||||||||
| Non-cash interest expense | (18,528) | (15,122) | (10,162) | (14,546) | (14,227) | (10,231) | (12,625) | ||||||||||||||||||||||||||||||||||||||||
| Total interest | 186,833 | 175,643 | 191,002 | 196,714 | 153,975 | 139,579 | 143,857 | ||||||||||||||||||||||||||||||||||||||||
| EBITDA | $ | 1,321,380 | $ | 1,320,674 | $ | 1,579,424 | $ | 910,717 | $ | 956,385 | $ | 941,864 | $ | 882,578 | |||||||||||||||||||||||||||||||||
| Interest coverage ratio | 7.07 | x | 7.52 | x | 8.27 | x | 4.63 | x | 6.21 | x | 6.75 | x | 6.14 | x | |||||||||||||||||||||||||||||||||
| Fixed Charge Coverage Ratio: | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest | $ | 186,833 | $ | 175,643 | $ | 191,002 | $ | 196,714 | $ | 153,975 | $ | 139,579 | $ | 143,857 | |||||||||||||||||||||||||||||||||
| Secured debt principal payments | 19,778 | 19,798 | 17,056 | 16,698 | 16,707 | 16,558 | 14,444 | ||||||||||||||||||||||||||||||||||||||||
| Total fixed charges | 206,611 | 195,441 | 208,058 | 213,412 | 170,682 | 156,137 | 158,301 | ||||||||||||||||||||||||||||||||||||||||
| EBITDA | $ | 1,321,380 | $ | 1,320,674 | $ | 1,579,424 | $ | 910,717 | $ | 956,385 | $ | 941,864 | $ | 882,578 | |||||||||||||||||||||||||||||||||
| Fixed charge coverage ratio | 6.40 | x | 6.76 | x | 7.59 | x | 4.27 | x | 5.60 | x | 6.03 | x | 5.58 | x | |||||||||||||||||||||||||||||||||
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| EBITDA Reconciliations: | 2026 | 2025 | ||||||||||||
| Net income (loss) | $ | 1,630,122 | $ | 844,070 | ||||||||||
| Interest expense | 567,284 | 448,171 | ||||||||||||
| Income tax expense (benefit) | (43,230) | (2,131) | ||||||||||||
| Depreciation and amortization | 2,067,302 | 1,490,717 | ||||||||||||
| EBITDA | $ | 4,221,478 | $ | 2,780,827 | ||||||||||
| Interest Coverage Ratio: | ||||||||||||||
| Interest expense | $ | 567,284 | $ | 448,171 | ||||||||||
| Non-cash interest expense | (43,812) | (37,083) | ||||||||||||
| Capitalized interest | 30,006 | 26,323 | ||||||||||||
| Total interest | 553,478 | 437,411 | ||||||||||||
| EBITDA | $ | 4,221,478 | $ | 2,780,827 | ||||||||||
| Interest coverage ratio | 7.63 | x | 6.36 | x | ||||||||||
| Fixed Charge Coverage Ratio: | ||||||||||||||
| Total interest | $ | 553,478 | $ | 437,411 | ||||||||||
| Secured debt principal payments | 56,632 | 47,709 | ||||||||||||
| Total fixed charges | 610,110 | 485,120 | ||||||||||||
| EBITDA | $ | 4,221,478 | $ | 2,780,827 | ||||||||||
| Fixed charge coverage ratio | 6.92 | x | 5.73 | x | ||||||||||
58
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented (dollars in thousands):
| Twelve Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA Reconciliations: | 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 1,747,889 | $ | 1,615,252 | $ | 1,456,895 | $ | 961,837 | $ | 967,823 | $ | 1,142,437 | $ | 1,098,489 | ||||||||||||||||||||||||||||||
| Interest expense | 771,068 | 740,465 | 699,708 | 651,955 | 602,640 | 579,638 | 571,905 | |||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | (48,215) | (52,996) | 10,036 | (7,116) | (2,017) | (9,058) | (9,010) | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 2,661,453 | 2,464,479 | 2,221,751 | 2,084,868 | 1,971,123 | 1,865,090 | 1,752,099 | |||||||||||||||||||||||||||||||||||||
| EBITDA | 5,132,195 | 4,767,200 | 4,388,390 | 3,691,544 | 3,539,569 | 3,578,107 | 3,413,483 | |||||||||||||||||||||||||||||||||||||
| Loss (income) from unconsolidated entities | 45,902 | 27,823 | 17,246 | 14,297 | 12,310 | 3,738 | (8,550) | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 1,556,569 | 1,556,076 | 1,555,786 | 1,555,858 | 61,467 | 85,827 | 80,645 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt, net | 12,622 | 5,800 | 3,816 | 9,245 | 6,156 | 6,575 | 8,280 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on real estate dispositions and acquisitions of controlling interests, net | (2,012,006) | (1,901,353) | (1,817,666) | (1,449,043) | (78,847) | (347,088) | (498,681) | |||||||||||||||||||||||||||||||||||||
| Impairment of assets | 109,976 | 79,605 | 73,707 | 121,283 | 99,006 | 119,346 | 101,864 | |||||||||||||||||||||||||||||||||||||
| Provision for loan losses, net | (3,339) | (2,481) | (5,777) | (9,416) | (2,277) | 828 | 7,104 | |||||||||||||||||||||||||||||||||||||
| Loss (gain) on derivatives and financial instruments, net | (5,656) | 26,026 | 25,617 | 22,407 | 18,961 | (22,627) | (28,043) | |||||||||||||||||||||||||||||||||||||
| Other expenses | 368,598 | 288,610 | 248,278 | 201,201 | 109,762 | 85,302 | 117,388 | |||||||||||||||||||||||||||||||||||||
| Casualty losses, net of recoveries | 20,986 | 13,107 | 10,565 | 11,367 | 13,178 | 14,488 | 13,945 | |||||||||||||||||||||||||||||||||||||
Other impairment (1) | 2,463 | — | 604 | 604 | 42,582 | 42,582 | 130,296 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,228,310 | $ | 4,860,413 | $ | 4,500,566 | $ | 4,169,347 | $ | 3,821,867 | $ | 3,567,078 | $ | 3,337,731 | ||||||||||||||||||||||||||||||
| Adjusted Interest Coverage Ratio: | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | $ | 771,068 | $ | 740,465 | $ | 699,708 | $ | 651,955 | $ | 602,640 | $ | 579,638 | $ | 571,905 | ||||||||||||||||||||||||||||||
| Capitalized interest | 37,482 | 30,926 | 30,728 | 33,799 | 40,483 | 50,001 | 55,826 | |||||||||||||||||||||||||||||||||||||
| Non-cash interest expense | (58,358) | (54,057) | (49,166) | (51,629) | (52,226) | (47,007) | (45,729) | |||||||||||||||||||||||||||||||||||||
| Total interest | 750,192 | 717,334 | 681,270 | 634,125 | 590,897 | 582,632 | 582,002 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,228,310 | $ | 4,860,413 | $ | 4,500,566 | $ | 4,169,347 | $ | 3,821,867 | $ | 3,567,078 | $ | 3,337,731 | ||||||||||||||||||||||||||||||
| Adjusted interest coverage ratio | 6.97 | x | 6.78 | x | 6.61 | x | 6.57 | x | 6.47 | x | 6.12 | x | 5.73 | x | ||||||||||||||||||||||||||||||
| Adjusted Fixed Charge Coverage Ratio: | ||||||||||||||||||||||||||||||||||||||||||||
| Total interest | $ | 750,192 | $ | 717,334 | $ | 681,270 | $ | 634,125 | $ | 590,897 | $ | 582,632 | $ | 582,002 | ||||||||||||||||||||||||||||||
| Secured debt principal payments | 73,330 | 70,259 | 67,019 | 64,408 | 62,627 | 56,337 | 49,886 | |||||||||||||||||||||||||||||||||||||
| Total fixed charges | 823,522 | 787,593 | 748,289 | 698,533 | 653,524 | 638,969 | 631,888 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,228,310 | $ | 4,860,413 | $ | 4,500,566 | $ | 4,169,347 | $ | 3,821,867 | $ | 3,567,078 | $ | 3,337,731 | ||||||||||||||||||||||||||||||
| Adjusted fixed charge coverage ratio | 6.35 | x | 6.17 | x | 6.01 | x | 5.97 | x | 5.85 | x | 5.58 | x | 5.28 | x | ||||||||||||||||||||||||||||||
(1) Represents the write-off of straight-line rent receivable and unamortized lease incentive balances relating to leases for which collection of substantially all contractual lease payments was no longer probable due primarily to agreements reached to convert Triple-net leased properties to Seniors Housing Operating RIDEA structures. | ||||||||||||||||||||||||||||||||||||||||||||
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our leverage ratios include book capitalization, undepreciated book capitalization and enterprise value. Book capitalization represents the sum of net debt (defined as total long-term debt excluding operating lease liabilities less cash and cash equivalents and restricted cash), total equity and redeemable noncontrolling interests. Undepreciated book capitalization represents book capitalization adjusted for accumulated depreciation and amortization. Enterprise value represents book capitalization adjusted for the fair market value of our common stock. Our leverage ratios are defined as the proportion of net debt to total capitalization.
The table below reflects the reconciliation of our leverage ratios to our balance sheets for the periods presented. Amounts are in thousands, except share price.
| As of | ||||||||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2026 | 2026 | 2025 | 2025 | 2025 | 2025 | ||||||||||||||||||||||||||||||||||||||
| Book capitalization: | ||||||||||||||||||||||||||||||||||||||||||||
| Unsecured credit facility and commercial paper | $ | 1,041,054 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
Long-term debt obligations(1) | 18,631,032 | 18,218,544 | 18,455,978 | 19,737,446 | 16,960,008 | 16,079,566 | 15,831,799 | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents and restricted cash | (2,416,007) | (2,097,164) | (4,819,293) | (5,209,539) | (6,940,573) | (4,523,511) | (3,610,285) | |||||||||||||||||||||||||||||||||||||
| Total net debt | 17,256,079 | 16,121,380 | 13,636,685 | 14,527,907 | 10,019,435 | 11,556,055 | 12,221,514 | |||||||||||||||||||||||||||||||||||||
Total equity and noncontrolling interests(2) | 49,864,014 | 47,663,572 | 44,929,270 | 43,202,939 | 39,312,382 | 36,546,301 | 34,581,977 | |||||||||||||||||||||||||||||||||||||
| Book capitalization | $ | 67,120,093 | $ | 63,784,952 | $ | 58,565,955 | $ | 57,730,846 | $ | 49,331,817 | $ | 48,102,356 | $ | 46,803,491 | ||||||||||||||||||||||||||||||
| Net debt to book capitalization ratio | 26% | 25% | 23% | 25% | 20% | 24% | 26% | |||||||||||||||||||||||||||||||||||||
| Undepreciated book capitalization: | ||||||||||||||||||||||||||||||||||||||||||||
| Total net debt | $ | 17,256,079 | $ | 16,121,380 | $ | 13,636,685 | $ | 14,527,907 | $ | 10,019,435 | $ | 11,556,055 | $ | 12,221,514 | ||||||||||||||||||||||||||||||
| Accumulated depreciation and amortization | 12,125,154 | 11,533,470 | 10,822,151 | 10,350,621 | 10,107,309 | 11,673,306 | 11,092,885 | |||||||||||||||||||||||||||||||||||||
Total equity and noncontrolling interests(2) | 49,864,014 | 47,663,572 | 44,929,270 | 43,202,939 | 39,312,382 | 36,546,301 | 34,581,977 | |||||||||||||||||||||||||||||||||||||
| Undepreciated book capitalization | $ | 79,245,247 | $ | 75,318,422 | $ | 69,388,106 | $ | 68,081,467 | $ | 59,439,126 | $ | 59,775,662 | $ | 57,896,376 | ||||||||||||||||||||||||||||||
| Net debt to undepreciated book capitalization ratio | 22% | 21% | 20% | 21% | 17% | 19% | 21% | |||||||||||||||||||||||||||||||||||||
| Enterprise value: | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares outstanding | 731,995 | 718,902 | 704,687 | 696,507 | 684,108 | 665,120 | 651,889 | |||||||||||||||||||||||||||||||||||||
| Period end share price | $ | 230.24 | $ | 226.97 | $ | 197.71 | $ | 185.61 | $ | 178.14 | $ | 153.73 | $ | 153.21 | ||||||||||||||||||||||||||||||
| Common equity market capitalization | $ | 168,534,529 | $ | 163,169,187 | $ | 139,323,667 | $ | 129,278,664 | $ | 121,866,999 | $ | 102,248,898 | $ | 99,875,914 | ||||||||||||||||||||||||||||||
| Total net debt | 17,256,079 | 16,121,380 | 13,636,685 | 14,527,907 | 10,019,435 | 11,556,055 | 12,221,514 | |||||||||||||||||||||||||||||||||||||
Noncontrolling interests(2) | 1,282,021 | 1,249,224 | 1,135,595 | 1,073,441 | 555,564 | 645,775 | 625,218 | |||||||||||||||||||||||||||||||||||||
| Consolidated enterprise value | $ | 187,072,629 | $ | 180,539,791 | $ | 154,095,947 | $ | 144,880,012 | $ | 132,441,998 | $ | 114,450,728 | $ | 112,722,646 | ||||||||||||||||||||||||||||||
| Net debt to consolidated enterprise value ratio | 9% | 9% | 9% | 10% | 8% | 10% | 11% | |||||||||||||||||||||||||||||||||||||
(1) Amounts include senior unsecured notes, secured debt and lease liabilities related to financing leases, as reflected on our Consolidated Balance Sheets. Operating lease liabilities related to ASC 842 are excluded. | ||||||||||||||||||||||||||||||||||||||||||||
(2) Includes amounts attributable to both redeemable noncontrolling interests and noncontrolling interests as reflected on our Consolidated Balance Sheets. | ||||||||||||||||||||||||||||||||||||||||||||
Critical Accounting Policies and Estimates
Our unaudited consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions. Management considers an accounting estimate or assumption critical if:
•the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and
•the impact of the estimates and assumptions on financial condition or operating performance is material.
Management has discussed the development and selection of its critical accounting policies and estimates with the Audit Committee of the Board of Directors. Management believes the current assumptions and other considerations used to estimate amounts reflected in our unaudited consolidated financial statements are appropriate and are not reasonably likely to change in the future. However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our unaudited consolidated financial statements, the resulting changes could have a material
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
adverse effect on our consolidated results of operations, liquidity and/or financial condition. Please refer to Note 2 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further information on significant accounting policies that impact us. There have been no material changes to the Company’s Critical Accounting Policies and Estimates previously disclosed in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “pro forma,” “estimate” or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. These statements include, among other things, the Company’s statements regarding its business strategy, expectations regarding new investments and investment dispositions, key underlying trends in its business and plans regarding future financing and availability of capital. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the impact of macroeconomic and geopolitical developments, including economic downturns, elevated inflation and interest rates, political or social conflict, unrest or violence or similar events; the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the healthcare industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the healthcare and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower’s ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters, public health emergencies and extreme weather affecting Welltower’s properties; Welltower’s ability to re-lease space at similar rates as vacancies occur; Welltower’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower’s properties; changes in rules or practices governing Welltower’s financial reporting; the movement of U.S. and foreign currency exchange rates and changes to U.S. and global monetary, fiscal or trade policies; Welltower’s approach to artificial intelligence; Welltower’s ability to maintain its qualification as a REIT; key management personnel recruitment and retention; geopolitical tensions or conflicts, such as the ongoing conflict between Russia and Ukraine and in the Middle East, and other risks described in Welltower’s reports filed from time to time with the SEC. Other important factors are identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Finally, Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is presented to provide a discussion of the risks associated with potential fluctuations in interest rates and foreign currency exchange rates. For more information, see Notes 12 and 17 to our unaudited consolidated financial statements.
We historically borrow on our unsecured revolving credit facility and commercial paper programs to acquire, construct or make loans relating to healthcare and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under our unsecured revolving credit facility and commercial paper programs. We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.
A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments after considering the effects of interest rate swaps, whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Principal | Change in | Principal | Change in | |||||||||||||||||||||||
| balance | fair value | balance | fair value | |||||||||||||||||||||||
| Senior unsecured notes | $ | 12,168,546 | $ | (493,167) | $ | 12,700,485 | $ | (575,958) | ||||||||||||||||||
| Secured debt | 2,935,547 | (114,900) | 2,334,830 | (98,414) | ||||||||||||||||||||||
| Totals | $ | 15,104,093 | $ | (608,067) | $ | 15,035,315 | $ | (674,372) | ||||||||||||||||||
Our variable rate debt, including our unsecured revolving credit facility and commercial paper programs, is reflected at fair value. At September 30, 2026, we had $3,993,389,000 outstanding related to our variable rate debt after considering the effects of interest rate swaps. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $39,934,000. At December 31, 2025, we had $4,064,010,000 of outstanding variable-rate debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $40,640,000.
We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or British Pounds Sterling relative to the U.S. Dollar impact the amount of net income we earn from our investments in Canada and the U.K. Based solely on our results for the three months ended September 30, 2026, a hypothetical 10% increase or decrease in the Canadian Dollar or British Pounds Sterling relative to the U.S. Dollar would result in a corresponding increase or decrease in our annualized net income from these investments of less than $67,000,000. We mitigate a portion of our foreign currency exposure through non-U.S. denominated borrowings and derivative instruments. Accordingly, the impact of changes in foreign currency exchange rates on our consolidated financial statements may differ from the sensitivity presented above. If we increase our international presence through investments in, or acquisitions or development of, seniors housing and healthcare properties outside the U.S., we may also decide to transact additional business or borrow funds in currencies other than U.S. Dollars, Canadian Dollars or British Pounds Sterling.
We have entered into various foreign currency debt obligations. As of September 30, 2026, the total principal amount of foreign currency debt obligations was $6,094,298,000, including $1,392,930,000 denominated in Pounds Sterling and $4,701,368,000 denominated in Canadian Dollars. Fluctuations in the exchange rates between these foreign currencies and the U.S. Dollar will impact the amount of U.S. Dollars that we will require to settle the foreign currency debt obligations at maturity. If the U.S. Dollar would have been weaker or stronger by 1% in comparison to these foreign currencies as of September 30, 2026, we estimate our obligation to cash settle the principal of these foreign currency debt obligations in U.S. Dollars would have increased or decreased by approximately $60,943,000. Our Pounds Sterling-denominated debt is hedged through cross currency swaps designated as fair value hedges, which are intended to substantially offset the impact of changes in foreign exchange rates on that exposure.
We are also party to foreign currency forward and cross currency swap contracts used to manage foreign currency exposures, including net investment hedging activities. As of September 30, 2026, the total notional amount of cross currency swap contracts, other than those designated as fair value hedges, was $19,155,944,000, including $11,741,349,000 denominated in Pounds Sterling and $7,414,595,000 denominated in Canadian Dollars. If the U.S. Dollar weakened or strengthened by 1% in comparison to foreign currencies, we estimate our obligation to cash settle these hedges would have increased or decreased by approximately $191,559,000.
For additional information regarding fair values of financial instruments, see “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” and Notes 12 and 17 to our unaudited consolidated financial statements.
Item 4. Controls and Procedures
Our management, under the supervision and with the participation of our Chief Executive Officer and Co-President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and the Co-President and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports we file with or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. No changes in our internal control over financial reporting occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, there are various legal proceedings pending against us that arise in the ordinary course of our business. Management does not believe that the resolution of any of these legal proceedings either individually or in the aggregate will have a material adverse effect on our business, results of operations or financial condition. Further, from time to time, we are party to certain legal proceedings for which third parties, such as tenants, operators and/or managers are contractually obligated to indemnify, defend and hold us harmless. In some of these matters, the indemnitors have insurance for the potential damages. In other matters, we are being defended by tenants and other obligated third parties and these indemnitors may not have sufficient insurance, assets, income or resources to satisfy their defense and indemnification obligations to us. The unfavorable resolution of such legal proceedings could, individually or in the aggregate, materially adversely affect the indemnitors’ ability to satisfy their respective obligations to us, which, in turn, could have a material adverse effect on our business, results of operations or financial condition. It is management’s opinion that there are currently no such legal proceedings pending that will, individually or in the aggregate, have such a material adverse effect. Despite management’s view of the ultimate resolution of these legal proceedings, we may have significant legal expenses and costs associated with the defense of such matters. Further, management cannot predict the outcome of these legal proceedings and if management’s expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, results of operations or financial condition.
Item 1A. Risk Factors
There have been no material changes from the risk factors identified under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended September 30, 2026, we acquired shares of our common stock held by employees who tendered shares to satisfy tax withholding obligations upon the vesting of previously issued restricted stock awards. Specifically, the number of shares of common stock acquired from employees and the average prices paid per share for each month in the three months ended September 30, 2026 are as shown in the table below.
| Issuer Purchases of Equity Securities | ||||||||||||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Repurchase Program | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Repurchase Program | ||||||||||||||||||||||
| July 1, 2026 through July 31, 2026 | 107 | $ | 233.29 | — | $ | 3,000,000,000 | ||||||||||||||||||||
| August 1, 2026 through August 31, 2026 | 2,069 | 234.52 | — | 3,000,000,000 | ||||||||||||||||||||||
| September 1, 2026 through September 30, 2026 | 363 | 239.61 | — | 3,000,000,000 | ||||||||||||||||||||||
| Totals | 2,539 | $ | 235.20 | — | $ | 3,000,000,000 | ||||||||||||||||||||
On November 7, 2022, our Board of Directors approved a share repurchase program for up to $3,000,000,000 of common stock (the “Stock Repurchase Program”). Under the Stock Repurchase Program, we are not required to purchase shares but may choose to do so in the open market or through privately-negotiated transactions, through block trades, by effecting a tender offer, by way of an accelerated share repurchase program, through the purchase of call options or the sale of put options, or otherwise, or by any combination of the foregoing. We expect to finance any share repurchases using available cash and may use proceeds from borrowings or debt offerings. The Stock Repurchase Program has no expiration date and does not obligate us to repurchase any specific number of shares. We did not repurchase any shares of our common stock through the Stock Repurchase Program during the three months ended September 30, 2026.
Item 5. Other Information
(c) Trading Plans
During the three months ended September 30, 2026, no director or Section 16 officer adopted terminated
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Item 6. Exhibits
| 10.1 | Equity Distribution Agreement, dated as of July 28, 2026, among Welltower Inc., Welltower OP LLC, the sales agents named therein and the related forward purchasers (filed with the Commission as Exhibit 1.1 to the Company’s Form 8-K filed July 28, 2026, and incorporated herein by reference thereto). | ||||||||||
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. | ||||||||||
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Co-President and Chief Financial Officer. | ||||||||||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer. | ||||||||||
| 32.2 | Certification pursuant to 18 U.S.C. Section 1350 by Co-President and Chief Financial Officer. | ||||||||||
| 101.INS | XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in Inline XBRL | ||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
WELLTOWER INC. | |||||||||||||||||
| Date: | October 27, 2026 | By: | /s/ SHANKH MITRA | ||||||||||||||
| Shankh Mitra, | |||||||||||||||||
| Chief Executive Officer (Principal Executive Officer) | |||||||||||||||||
| Date: | October 27, 2026 | By: | /s/ TIMOTHY G. MCHUGH | ||||||||||||||
| Timothy G. McHugh, | |||||||||||||||||
| Co-President and Chief Financial Officer (Principal Financial Officer) | |||||||||||||||||
| Date: | October 27, 2026 | By: | /s/ JOSHUA T. FIEWEGER | ||||||||||||||
| Joshua T. Fieweger, | |||||||||||||||||
| Chief Accounting Officer (Principal Accounting Officer) | |||||||||||||||||
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