$14B in Senior Housing Acquisitions, New Incentive Model Help Usher In ‘Welltower 3.0’

Welltower (NYSE: WELL) has begun a new chapter with an even narrower focus on senior living and new incentives for operators and their employees – all part of its newest iteration, “Welltower 3.0”

On Monday, the Toledo, Ohio-based real estate investment trust (REIT) announced a blockbuster series of transactions totaling $14 billion to acquire more than 700 senior living communities, comprising more than 46,000 units in the U.K., U.S., and Canada.

The company paired those acquisitions with asset dispositions – including the sale of its 108-property outpatient medical real estate portfolio – loan payoffs “and other capital recycling activity” to the tune of $9 billion.

Welltower also is launching a new “all-in” alignment model dubbed RIDEA 6.0 with three longtime operating partners, Cogir, Oakmont Senior Living, and StoryPoint. Under the new model, the operators will eschew a “significant portion” of their incentive fees with the REIT and instead take units of ownership in its management company, Welltower OP.

To demonstrate their confidence in the strategy, the REIT’s five executive officers led by CEO Shankh Mitra are for the next decade limiting their annual salaries to $110,000 and taking a single, long-term equity-based incentive award also in the form of Welltower OP units.

Additionally, Welltower announced a new $10 million grant for frontline workers at top-performing communities.

The company also is overhauling its Welltower Business System to further cement its “3.0” iteration and status as “an operating company in a real estate wrapper,” Mitra said. All of this is aimed at helping Welltower reap opportunities in the coming decade, and bring about what Mitra sees as a “utopian idea of everyone swimming or sinking together.”

Although Welltower’s current stock price represents at or near all-time highs, he views the company’s results so far as only “somewhat satisfactory.” He added that the REIT seeks to disrupt itself to stay on the cutting edge similar to how Netflix disrupted its own operations by pivoting from mailing DVD rentals to digital streaming.

“If you don’t disrupt your organization from within, somebody else will do it for you,” Mitra said. “We have taken it upon ourselves to transform this business digitally, to get to a better outcome for our customers and site-level employees.”

Welltower as of the end of the third quarter of 2025 had 763 communities in its senior housing operating portfolio (SHOP) and 246 communities in its triple-net senior housing portfolio.

Welltower’s stock price registered at $179.90 per share by the time financial markets closed Tuesday.

Narrower focus, new incentives help create ‘Welltower 3.0’

Central to Welltower’s “new era” is a new concentration on senior housing communities. With its recent acquisitions and sales, more than 80% of the REIT’s annual net operating income (NOI) will stem from senior housing.

“We are doubling down our efforts, attention and resources to our senior housing business, with the singular focus of operational excellence through a digital transformation,” said Welltower COO John Burkart during the earnings call Tuesday.

Exemplifying that effort in the third quarter was Welltower’s deal with Barchester Healthcare to acquire a portfolio of 284 communities in the U.K. for a sum totaling more than $6.9 billion in today’s exchange rates. The portfolio is composed of 111 communities managed by Barchester under a RIDEA contract, 152 communities leased under triple-net agreements and 21 projects slated to be managed in a RIDEA contract once they open.

The Barchester portfolio includes stabilized communities and properties still in lease-up with an average occupancy rate in the high-70 percentiles. Welltower had previously sought to acquire the company and its care homes years ago, but ultimately withdrew its bid in 2020.

“We have carefully studied many transactions that Warren [Buffett] and Charlie have completed over the years with family owned businesses, and I’m delighted to inform you that this $7 billion negotiation was done during a single sitting, with a firm handshake,” Mitra said. “Our years of conversation and close familiarity with the Barchester assets and management was certainly helpful as preparation, equally important was the integrity and professionalism demonstrated by our counterparty.”

Beyond building out its portfolio to focus on senior housing, Welltower also retooled its incentive structure starting with three of its closest operating partners, Cogir, Oakmont and StoryPoint.

“We’re trying to simply align the interests of our operating partners with our owners,” Mitra said. “Regional density is very important to us, so if there will be opportunities to bring other operating partners into the fold, we’ll consider it.”

As of 3Q25, Welltower is under contract or has closed on $4 billion of senior housing acquisitions spanning nearly 40 transactions across over 150 communities. That includes “trophy senior housing communities” in the U.S. East Coast region, including in Boston and Westchester County, New York.

The REIT has, according to a business update, worked to “rebuild” its portfolio of communities in the region using a “rifle-shot approach to capital deployment, utilizing its data science platform, identifying trophy assets along the Route 128 corridor and in triple-A locations including Brookline, Massachusetts.”

Included in the REIT’s incentive overhaul is a new program called the Welltower Fellowship Grant. Through the program, the company is set to dole out $10 million in Welltower stock annually to frontline staffers working at the top-10 performing communities in its portfolio. The grant is meant to also honor the memory of the late businessperson Charlie Munger, “a man who meant so much” to Mitra and the company’s management team.

“Imagine a world where our site level employees work in beautiful and inviting communities equipped with more advanced and easy-to-use tools, freeing them from paperwork and administrative burdens,” Mitra said Tuesday during Welltower’s third-quarter 2025 earnings call. “And they get paid more than they otherwise would in a competitive community, sometimes in a significant and life-changing way due to Welltower’s grants.”

He added: “we take the simple idea of Berkshire [Hathaway]-style stewardship along with Costco-style customer obsession, very, very seriously.”

New ‘tech quad’ and ‘almost unlimited appetite’ for tech investments

When it comes to technology and the personnel supporting it, Welltower is hungry for more.

Welltower this week also announced the hiring of Jeff Stott, formerly SVP and head of technology at Extra Space Storage, as chief technology officer. Welltower also hired Tucker Joseph and Logan Grizzel to the newly created roles of chief information officer and chief innovation officer, respectively.

Along with the company’s chief data officer, Swagat Banerjee, the new hires will form what Welltower is calling its “tech quad.” The group will lead the REIT’s data science, digital transformation and general innovation efforts.

“Whether it’s technology itself or it’s people around technology, we almost have an unlimited appetite to do it,” Mitra said.

All of this is meant to help the REIT reduce “latency” in the communities it owns. Generally, whether a community will respond to a prospect’s inquiry can be measured by a coin flip, Mitra said. And when operators are getting in touch with prospects, it can take as many as two or more business days.

Welltower believes that is still too long. Using its business system, operating partners are measuring response times in the single minutes, not days.

“I expect someday that no calls will go unanswered, and … that will be taking latency to zero,” Mitra said. “Those days of operations are coming.”

In general, Mitra sees the senior living industry lacking “real power of technology to improve day-to-day operations with a goal of enhancing the lives of residents and the workflow for site level employees.”

“With this team in place led by Jeff, Logan, Swagat and Tucker, we have immediately bolstered our ability to accelerate growth and innovation. At Welltower, we embrace the principle that efficiency is maximized when contrast is greatest: the hottest possible source paired with the coldest possible sink,” Mitra stated.

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