ウェルタワー（WELL）2026年第3四半期決算説明会：SHOP部門のNOIが21%増、FFOガイダンスを上方修正

主なポイント

• Welltowerが発表した2026年第3四半期の標準化FFO（投資運用キャッシュフロー）は、希薄化後1株あたり1.67ドルとなり、前年同期比で24.6%増加しました。普通株主に帰属する純利益は希薄化後1株あたり0.54ドルでした。
• 全ポートフォリオの既存物件純営業利益（NOI）は15.8%増加し、シニアハウジング運用ポートフォリオ（SHOP）の21%の成長が寄与しました。SHOPの既存物件NOI成長率は、これで16四半期連続で20%を超えました。
• SHOPのオーガニック増収率は9.1%となり、入居率の改善と5.3%のRevPOR（入居室あたり平均収入）成長が牽引しました。既存物件の営業費用は4.3%増加したのに対し、ExpPOR（入居室あたり営業費用）の増加はわずか0.8%にとどまりました。
• SHOPの既存物件NOIマージンは前年同期比310ベーシスポイント上昇の31.7%に達しました。フロースルー・マージンは営業レバレッジと価格改定の寄与拡大を反映し、コロナ禍以降で最高となる66%に上昇しました。
• 経営陣は通期の標準化FFO見通しの中央値を0.10ドル引き上げ、1株あたり6.50ドルとしました。新たなレンジである6.47ドル〜6.53ドルは、中央値で前年比22.9%の成長を示唆しています。
• 年初からの投資実績は210億ドルに達しました。Welltowerは第3四半期までに133億ドル規模の取引を完了させており、さらに50件・計77億ドルの取引完了に向けて手続きを進めています。

主要財務データ

事業および業績ハイライト

SHOPは全既存物件NOIの約70%を占めました。平均入居率は第2四半期から前四半期比で120ベーシスポイント上昇し、前年同期比では320ベーシスポイント改善しました。ポートフォリオの約3分の2が入居率90%を超えており、これらの施設では6%を超えるRevPOR成長を達成しました。

経営陣によると、増収の主因は入居率の改善から価格改定効果へと徐々にシフトしています。入居率90%超の施設群は引き続き力強い価格決定力を発揮しており、同群のNOI成長率は約21%に達しました。経営陣は、この価格決定力が単なる人口動態によるものではなく、プレミアム物件、富裕層顧客、そして優れた運用実行力によるものだと分析しています。

インフレ圧力の中でも費用の増加は抑制されました。入居室あたり人件費は0.9%増にとどまり、カナダのExpPORはほぼ横ばいでした。Welltowerは、同社のビジネスシステム、地域密着度、営業レバレッジが効率向上に寄与しているとしていますが、経営陣は長期的なExpPOR成長率の具体的目標値については言及を避けました。

シニアハウジングのトリプルネット既存物件NOIは4.2%増加し、直近12ヶ月のEBITDARカバレッジは1.22倍でした。専門看護施設の既存物件NOIは2.8%増加し、EBITDARカバレッジは1.32倍となりました。

Welltowerは第3四半期中に、総額38億ドルにおよぶ30件以上の取引を完了しました。取引金額の中央値は3,800万ドルでした。買収したシニアハウジング施設の平均築年数は4年、平均戸数は160戸以上、平均入居率は66%でした。経営陣によると、これらの資産は再調達原価から推定10%〜15%割り引かれた価格で取得されました。

同社はまた、相対取引による8件の取引を通じ、約8億5,000万ドルの専門看護施設買収を完了しました。経営陣は賃料利回りが約9%を維持していると説明し、オペレーターの選定と下値リスクの保護を強調しました。

資本配分およびバランスシート

同社は当四半期中に44億ドルの資本を調達しました。これには株式およびOPユニット発行による31億ドル、資本リサイクルによる4億8,000万ドル、カナダの無担保債市場を通じた8億3,500万ドルが含まれます。

同社は41億ドルの総投資活動に資金を充当し、6億ドル以上の負債を返済しました。カナダでの資金調達には、加重平均表面利率3.95%、平均期間約6年のシニア無担保社債11億5,000万カナダドルが含まれています。

経営陣は、24億ドルの手元資金、最近の資金調達、および予定されている約19億ドルの資産売却により、公表済みの残り77億ドルの投資活動を十分に賄える体制が整ったと述べました。年末時点の純有利子負債/調整後EBITDA倍率は、取引のタイミングにより変動するものの、3倍台前半にとどまる見込みです。

同社は年初来で196件の取引を完了または発表しており、案件規模の中央値は3,550万ドルでした。残る77億ドルのパイプラインのうち約85%は相対取引で調達されたものであり、その半数以上で売主が対価の少なくとも一部としてWelltowerのユニット受領を受け入れています。

経営陣の見通し（ガイダンス）

標準化FFO中央値の0.10ドルの引き上げには、SHOPのNOIから0.03ドル、投資および財務活動から0.05ドル、さらに為替や法人税の好影響が含まれています。これらの増益要因は、一般管理費の増加予想によって一部相殺されました。

経営陣は、第2四半期および第3四半期に見られた前四半期比での勢いが衰えなければ、好調な入居率傾向は2027年まで続くと考えています。また、施設が満床に近づくにつれて価格改定が増収のより重要な推進力になると予想していますが、その成果は物件の品質、地域市場への適合性、および運用の実行力に依存すると強調しました。

リスクおよび注視すべき点

経営陣は、金利上昇、インフレの再燃、地政学的リスクの不透明感、プライベートクレジットや商業不動産ローン担保証券（CMBS）におけるストレスを強調しました。米国のシニアハウジング関連債務の約80億ドルが2026年に満期を迎え、年間の満期到達額は2027年と2028年には100億ドル〜120億ドルに増加すると予想されています。同社はこれが買収機会を生み出す可能性があるとみる一方で、セクター全体の資金調達圧力を反映しているとも考えています。

買収したシニアハウジング資産の平均入居率は66%にとどまっており、入居促進による伸びしろがある反面、実行リスクも存在します。Welltowerは買収した多くの施設でオペレーターの変更を進めており、短期的には混乱が生じる可能性があります。

経営陣はまた、シニアハウジング事業が一様ではないことにも注意を促しました。同じ市場内であっても、プロダクト・マーケット・フィット（市場適合性）、オペレーターの質、地域での実行力によって、成長成果に大幅な違いが生じる可能性があります。

質疑応答（Q&A）のハイライト

• 価格決定力：経営陣によると、現在の価格環境は過去約11年間で最も力強い状態です。この加速は既存入居者の大幅な値上げではなく、主に新規募集賃料（ストリートレート）の上昇によって牽引されています。
• 成長の制約要因：Welltowerは自社を資本制約ではなく機会の制約に直面していると説明しました。経営陣は、長期的な1株あたりキャッシュフローの成長は、追加の買収ではなく、主に既存ポートフォリオおよびWelltowerビジネスシステム内での実行力にかかっていると述べました。
• 入居率のポテンシャル：経営陣は、ポートフォリオを固定して考えた場合、既存ポートフォリオの入居率が90%を超えられない構造的な理由はないとみています。ただし、入居率の低い資産の買収により、発表されるポートフォリオ全体の平均値が低下する可能性があります。
• 買収戦略：同社は、取引完了の確実性、取引スピード、合意された条件の遵守姿勢が相対取引の確保に役立っていると説明しました。なお、Welltowerがスクリーニングした資産のうち、実際に買収に至るのは3%未満です。
• 開発供給：経営陣は、現在の開発リターンは全般的に魅力的ではないと述べました。価格決定力の強い高級市場では新規供給が成立する可能性を認めたものの、許認可取得や建設に何年もかかる可能性があると指摘しました。
• 専門看護施設：Genesis Healthcareでの教訓を踏まえ、Welltowerはオペレーターの引受審査、下値保護、物件レベルでの実行力に重点を置くようになりました。Genesisは連邦破産法第11条の手続きを完了し、Welltowerは1億3,000万ドルのシニア担保付きタームローン全額の返済を受けました。

決算説明会（トランスクリプト）全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, and welcome to the Welltower Third Quarter 2026 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Matt McQueen, Chief Legal Officer and General Counsel. You may begin.

Matthew McQueen

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

Shankh Mitra

Thank you, Matt, and good morning, everyone. I will review business trends and our capital allocation priorities, and the team will follow the usual cadence. Our business continued to fire on all cylinders during the third quarter as the all-weather compounding engine we have built continues to deliver exceptional results for our existing investors. The strong end market demand for our luxury senior living product, coupled with attractive capital deployment opportunities drove revenue growth of 38% and adjusted EBITDA growth of 35%. Most notably, we delivered nearly 25% FFO per share growth while maintaining extremely low leverage balance sheet and doubling down on our investments in operations and technology. These results, coupled with momentum that we are carrying into the fourth quarter enabled us to raise the midpoint of our full year FFO outlook by $0.10 per share to $6.50, which if achieved, would represent a 23% year-over-year growth.

What matters to us, however, is not simply the magnitude of the growth in a given quarter or year, but the duration of that growth. we believe that favorable demand supply backdrop when combined, more importantly, with an affluent customer base and the digital transformation of our portfolio through Welltower business system gives us a long runway to compound our share earnings and cash flow growth for existing investors.

To be clear, our recent results and outlook are not simply a byproduct of demographic trends, or the expansion of our footprint. Instead, they are a function of our long-held view that enduring businesses simply cannot respond to change. They must continue to invent themselves ahead of it. In that vein, we have retooled nearly every aspect of a company over the past decade from capital allocation to improving the resident and employee experience in addition to meaningfully deleveraging our balance sheet.

These actions have positioned us not to simply withstand an increasingly uncertain economic landscape, but to remain on offense and continue to deliver outsized growth, almost irrespective of macro conditions.

Turning back to the quarter. Our total portfolio same-store net operating income increased nearly 16% and second highest level of growth achieved in our recorded history. This is largely a function of mix shift of our portfolio, which we have discussed previously as our senior housing portfolio -- operating portfolio, or SHOP now represent 70% of total same-store NOI. And our SHOP performance remained strong, delivering 9.1% organic revenue growth driven by another period of both healthy occupancy gains and robust pricing power. Against a backdrop of growing macroeconomic uncertainty, the demand for luxury senior living remained resilient during the summer months. with 120 basis points of average occupancy increase from second quarter.

This gain exceeded the sequential occupancy increase recorded during the same period last year, reflecting uncorrelated demand for our product offering. And while it is still early, we're encouraged by the trends we're seeing to the start of the fourth quarter. unless the strong sequential tailwind we experienced in Q2 and Q3 subside, we should be in a position to deliver another year of favorable occupancy growth next year. However, as communities are filling up, the deliberate and methodical handover from occupancy to pricing as the driver of revenue growth is taking place under the surface. Our all-in measure of pricing or RevPAR or unit revenue increased by 5.3% during the period, highlighting the strong pricing power maintained by our operators.

If we zoom into the U.S., where occupancy crossed 90% the portfolio achieved RevPOR growth of 5.5%. If you further zoom into a traditional senior living business, the same number was 5.8%. Though quarterly numbers are irrelevant as we are focused on long term, the underlying trend perhaps provides a peak into the future, which is inherently uncertain. Taking a first principal approach, it makes fundamental sense that rates should continue to move higher as capacity in the system grows increasingly scarce. But more importantly, our operators pricing power reflects a luxury product in premium locations coupled with strong value proposition of the service that our operating partners provide to residents and their families.

On the expense side, cost growth across our senior housing portfolio remained well contained even amongst the broader inflationary pressure. Expenses in shop grew 4.3% or below 1% on an expor basis due to operating leverage, enhance our high fixed cost business alongside early wins from Walt or Business System. The favorable spread between Report and export growth persisted during the third quarter, driving another period of outsized margin expansion of 300 basis points. Going forward, we continue to see sustained opportunity for margin expansion as this delta is expected to remain wide while WBS initiatives continue to bear fruit. As John will describe momentarily, the flow-through margin of our SHOP business reached a record high of high 66%, resulting in more cash flow dropping to the bottom line for each incremental revenue. When assessing the future earnings part of this platform, this relationship is important to consider along with the pricing versus occupancy dynamic mentioned above.

From a capital allocation standpoint, there was no letup in activity across U.S., U.K. and Canada. After a record-setting year of capital deployment in 2025, we have completed or announced over $21 billion of investment activity year-to-date. Similar to last year, we got lucky again with unprecedented interest rate and macro volatility this year, which drove this significant opportunity set. It didn't hurt that we are prepared with both an underlevered balance sheet and the most pristine reputation in this business as an entrepreneur shop, which operates at lightning speed and the highest level of transaction integrity. $21 billion could very well be the size of a large cap REIT but the total acquisition volume is the least relevant measure of what we have accomplished.

Instead of large-scale M&A, which we shown like the plague, we completed 196 granular transaction with a median size of $35.5 million in 204 business days. More importantly, please see Page 9 of our business update for the number of transactions we rejected owning to issues concerning price, location, product market fit, management contract or other issues. Nonetheless, as Nikhil will describe shortly, and pipeline opportunities remain robust, visible and actionable across our regions. As we have discussed previously, the vast majority of our acquisitions are granular off-market opportunities with a clear path of driving meaningfully higher cash flow post closing.

Said differently, we're not spread investing shadow banks that are fixed rated on cap rate, relative size and near-term earnings accretion. Those metrics take on outsized importance when there is little ability to drive excess operational cash flow from underlying portfolio. We're playing a different game, buying an attractive basis and compounding cash flow over time through simple and yet extraordinarily difficult post closing execution. This advantageous divergence is only widening, and it is critical how we think about creating long-term value for our existing investors. At the same time, I would be remiss not to mention that we continuously seek opportunities to refine the portfolio through selective dispositions, with $6 billion of dispositions this year we're clearly willing to accept some near-term dilution to extend and amplify the duration of our par share earnings and cash flow growth.

Lastly, given the current macro backdrop, it's worth highlighting that our balance sheet remains in excellent shape. Tim will provide the details, but we maintain exceptionally low leverage with a meaningfully ramp in free cash flow expected in the coming years, our financial flexibility will be enhanced even further. And with that, I will turn it over to John.

John Burkart

Thank you, and good morning, everyone. We reported solid third quarter results with continued strength across the business. Total portfolio same-store NOI increased 15.8%, driven by another standout performance from our senior housing operating portfolio which posted 21% year-over-year growth. This marks the 16th consecutive quarter or 4 full years of compounding growth in which the SHOP same-store NOI growth exceeded 20%. As Sean mentioned, our seniors housing portfolio remained largely insulated from growing economic uncertainty and heightened geopolitical turbulence. And while macro conditions may ebb and flow, our operating partners remain unwavering in their focus on maximizing NOI through a combination of occupancy, rate and expenses while also providing a superior resident and employee experience.

In that light, during the quarter, we reported a healthy occupancy gain of 320 basis points, but we're particularly pleased with an acceleration in RevPOR growth to 5.3%. The dual revenue drivers of occupancy and rate resulted in another quarter in which organic revenue growth exceeded 9%. Handoff from occupancy to rate as the primary driver of top line growth is now taking shape as we expected, with communities rapidly leasing up and further reinforced by the substantial affluence of residents across our micro markets. In communities above 90% occupancy, which represent nearly 2/3 of the portfolio, our operators are driving RevPOR growth above 6%. We're also delighted with -- we are also delighted with our operators' expense management with same-store OpEx increasing just 4.3% year-over-year. More importantly, after adjusting for occupancy gains during the period, expor a more relevant measure of underlying cost growth increased only 80 basis points.

In Canada, expor growth was essentially flat reflecting occupancy moving in the low 90% range and benign underlying expense pressure. While operational scaling has undoubtedly contributed to muted expor growth of equal, if not greater importance, are our ongoing efforts to leverage technology, systems, processes and data through WBS to improve efficiency while simultaneously enhancing the resident and site level employee experience. In terms of labor, our largest expense item by a wide margin wage growth has been subdued relative to prior years. While labor availability and retention trends have generally improved. As a result, comp for or compensation per occupied room increased just 90 basis points. Looking ahead, we expect further improvement in key metrics, including employee turnover driven by WBS initiatives, our regional densification strategy and the Munger brand.

From an overall profitability standpoint, SHOP achieved a same-store NOI margin of 31.7%, up 310 basis points year-over-year. Notably, the flow-through margin for the quarter came in at 66%, a post-covid high watermark for the company. While operator leverage provides meaningful flow-through. The rental rate growth is more -- is a more powerful driver as incremental revenue carries essentially no associated costs. We are encouraged by another quarter of favorable results. But as you know, we take nothing for granted. Senior housing is a 24/7 business where execution at the micro level remains critically important. This is anything but a commodity business. Even with the same micro market, differences in operator acumen and product market fit can mean the difference between 2% growth and 20% growth.

This is exactly why together with our best-in-class operators, our priority remains creating a modern digital experience for our residents, their families and site level employees through Welltower Business System. The data it generates is what enables our partners to optimize execution at that micro level. To sum it up, it was another strong quarter for Welltower and our operators, but we remain squarely focused on the future. I'm grateful for all the hard work by our site team members, our operating partners and the Welltower team. The opportunity set to drive cash flow from our existing portfolio continues to expand and remains our top priority. We're thrilled with the caliber of talent we continue to attract and excited about the broader team -- what the broader team will deliver in 2027 and the years beyond. With that, I'll turn it over to Nikhil.

Nikhil Chaudhri

Thanks, John, and good morning, everyone. Since our last call, the macroeconomic environment has continued to deteriorate. In September, the Fed raised rates for the first time since 2023. A the ECB and the Bank of Japan raised rates the same month, taking Japan's policy rate to its highest level since 1995. Inflation reaccelerated to 3.7% in September and markets are now pricing more hikes, not cuts. At the long end, the picture is darker. The 30-year treasury moved above 5.3% in August, a level last seen in 2007. And earlier this month, the tenure touched 5.36%, its highest level since 2002. Meanwhile, the war in the Middle East has widened rather than resolved with a tax on Gulf energy infrastructure, pushing oil back above $100 a barrel. The stress from a highly volatile macro and geopolitical environment is showing up exactly where you would expect for equity capital we are seeing core capital seek double-digit core plus returns without stepping up on the risk curve.

On the credit side, private credit defaults are running near 6% and once PIK amendments and extensions are counted versus historic averages of 2% to 2.5%, and global regulators now designate the sector a systemic risk. CMBS delinquencies have climbed above 8%, and the highest since late 2020, and special servicing rates are the highest since 2013. Spreads on the lowest rated corporate credit at the widest since 2022. Let me be clear about what this means for our sector and for us. After roughly $8 billion of U.S. seniors housing debt comes due in 2026, annual maturities step up further in '27 and '28 to between $10 billion and $12 billion. Much of this debt was originated between 2020 and '22 in a fundamentally different rate environment. And the owners of these assets face a critical decision recapitalize or sell. While some owners may recapitalize, most will sell as the impact of rising rates offset improved industry fundamentals.

That is where Welltower comes in. When financing markets turn volatile, sellers stop asking who will pay the most on paper. They ask who will actually close on time at the agreed price without a retrade. Our reputation has been built on exactly that: speed, quality and ease of execution and honoring our word to the life of a transaction. We have strategically positioned our balance sheet to support that reputation through an entire cycle with the liquidity and flexibility to honor our commitments and capitalize on opportunities when others are constrained. In a handshake business, we have a balance sheet that no one ever questions. As the 2027 maturity wall and the higher-for-longer interest rates come into focus, we are seeing our investment activity expand. We remain extremely disciplined in the opportunities that we pursue acquiring less than 3% of the assets that we screen by leveraging our proprietary and irreplaceable data science platform.

Even at that hit rate since our last call, our investment activity has increased by another $5.5 billion, bringing our year-to-date investment activity to $21 billion. With $13.3 billion closed through the end of the third quarter, our team is working diligently to close the remaining $7.7 billion across 50 different transactions. Nearly 85% of the $7.7 billion of activity was sourced off market and more than 50% involves the sellers taking at least some portion of the sales proceeds in Welltower units. I want to reflect on this for a moment. In a market where cash is scarce and expensive, these owners have a choice. They can cash out or they can roll their equity into Welltower and stay invested in the sector alongside us. Increasingly, they are choosing the latter. They are choosing our balance sheet over their own.

We take that as the most meaningful water confidence a counterparty can give. They are not just selling to us, they are investing alongside this. Digging into the third quarter, we completed more than 30 transactions totaling $3.8 billion with a median transaction size of $38 million. 70% of this activity spend, 43 communities in our seniors housing operating portfolio. These assets have an average age of 4 years, an average size of over 160 units and are currently 66% occupied. These communities have a blended RevPOR in excess of $10,000 per month and represent amongst the highest quality cohorts of our acquisition activity in the last few years. These assets were acquired at an approximately 10% to 15% discount replacement cost with material growth potential as we lease them up and stabilize operations by working closely with our operating partners and leveraging WBS.

I encourage you all to review some of the images of these communities in our earnings presentation. In addition to these seniors housing properties, our roughly $850 million of SNF acquisitions -- in this quarter, spend 8 different transactions with 100% of them sourced off market, a reflection of our deep network in that part of the business. Staying on skilled nursing for a moment, I am pleased to report that Genesis Healthcare has completed its Chapter 11 process, and Welltower received full repayment of our $130 million of senior secured term loans. When we substantially exited this relationship in 2021, we reported an 8.5% unlevered IRR on our investments since 2011. Since then, interim payments and this final repayment takes that IRR to nearly 9%. When this management team took over nearly 11 years ago, Genesis, a highly levered and underperforming company represented almost 20% of our earnings, with our and exposure is sitting at more than $600 million.

The Street would have preferred, we split the company as others did or sell at the bottom and move on. We chose to fight. We sold a large portfolio to a private equity buyer financed through 1 of the largest CMBS transactions in health care real estate. We formed the sector's first direct joint venture with Asian Capital and later bought it back at a discount. We recapitalized and invested as participating preferred equity in other assets with a stronger operator to learn from a better track record than our own. We restructured out of court in the middle of a pandemic. And finally, we saw it through a long in messy bankruptcy. I'll be candid, a sub-10% return has nothing to celebrate, but Genesis taught us the skilled nursing business and its many intricacies allowing us to overcome our negative bias of the space through this experience.

We learned to underwrite operators, not just buildings and to structure for the downside because we had lived it. and it showed us something about our own team that a good investment never could. When things go wrong, we lean in. In good times, everyone looks like a great investor. Hard times reveal character. Genesis is now behind us. The lessons will stay with us for a very long time. With that, I'll turn the call over to Tim to walk through our financial results. .

Tim McHugh

Thank you, Nikhil. My comments today will focus on our third quarter 2026 results. The performance of our triple net investment segments, our capital activity, a balance sheet and liquidity update and finally, an update to our full year 2026 outlook. Welltower reported third quarter net income attributable to common stockholders of $0.54 per diluted share and normalized funds from operations of $1.67 per diluted share. representing 24.6% year-over-year growth. We also reported year-over-year total portfolio same-store NOI growth of 15.8%, driven by 21% growth in our show portfolio. .

Now turning to the performance of our triple net properties in the quarter. In our senior housing triple-net portfolio, same-store NOI increased 4.2% year-over-year. and trailing 12-month EBITDAR coverage was 1.22x. Next, same-store NOI in our skilled nursing portfolio grew 2.8% year-over-year and trailing 12-month EBITDAR coverage was 1.32x. Moving on to capital activity. During the third quarter, we raised $4.4 billion of capital, comprised of $3.1 billion through share issuance and OP unit funding, $480 million of capital recycling and $835 million through our return to the Canadian unsecured market, which was our first native issuance since 2019.

This capital, along with retained cash flow, allowed us to fund $4.1 billion of gross investment activity and retire over $600 million of debt, while ending the quarter with $2.4 billion of cash on hand and net debt to adjusted EBITDA of 3.02x. We -- on the Canadian issuance, we raised $1.15 billion of senior unsecured notes at a blended coupon of 3.95% and an average term of roughly 6 years, allowing us to extend the duration of our liabilities at attractive pricing and highlighting the efficiency with which we are able to source global capital. Our $2.4 billion of cash on hand together with recent capital activity and approximately $1.9 billion of expected dispositions, position us to fund approximately $7.7 billion of incremental investment activity.

Taken together, this net investment activity and continued cash flow growth in the in-place portfolio are expected to result in year-end net debt to adjusted EBITDA ending in the low 3s, reflecting the timing of our net investment activity. Before turning to guidance, I want to spend a moment on the earnings growth implied by the midpoint of our refreshed full year guidance range. 22.9% normalized FFO per share growth for 2026. Now ahead of our full year growth we delivered in 2025 and off a meaningfully larger base. On the fourth quarter call earlier this year, I highlighted how the transformation of our portfolio anchored by the disposition of our outpatient medical portfolio would change both the structural growth rate of the enterprise and the capital efficiency of that growth. Senior Housing operating revenue as reported in the third quarter now approximates $12.5 billion annualized. And the growth of that revenue base is becoming more durable and visible as RevPOR growth accelerated again in the quarter. and flow-through also moved higher with our show portfolio converting approximately 66% of incremental revenue into net operating income.

As occupancy continues to trend higher, unit economics should continue to improve further. That is exactly what is coming through in these results. An improving portfolio mix, flow-through that continues to move higher and revenue growth increasingly led by rate. and we believe each of these trends has room to run. Moving on to guidance. Last night, we updated our full year 2026 outlook for net income attributable to common stockholders to $3.31 to $3.37 per diluted share and normalized FFO to $6.47 to $6.53 per diluted share or $6.50 at the midpoint. Our normalized FFO guidance represents a $0.10 increase at the midpoint from our prior normalized FFO range. This increase is comprised of a $0.03 increase from senior housing operating NOI or $0.05 increase from investment and financing activity and a 1.5% increase from FX and income tax, slightly offset by higher expected G&A.

Our updated outlook assumes total portfolio year-over-year same-store NOI growth of 15% to 16.5%, driven by subsegment growth of outpatient medical, 2% to 3% and long-term project, 2% to 3%; senior housing triple net, 3.5% to 4.5%. And finally, senior housing operating of 20.25% to 21.5%. The which is driven by the following midpoints of their respective ranges. Revenue growth of 9.3% comprised of RevPOR growth of 5.1% and year-over-year occupancy growth of 350 basis points. an expense growth of 4.6%, equating to export growth of approximately 60 basis points. Before handing the call back to Shankh, I'd like to take a moment to highlight several enhancements we've made to our disclosure. -- including combining our earnings release and supplemental into a single integrated document and expanding transparency across our operating performance, growth drivers and capital-light businesses.

These changes were shaped by feedback from our investors and analysts, and we appreciate the continued engagement. We believe these enhancements will streamline how you engage with our results while providing greater visibility into our business and the core drivers of long-term per share cash flow growth. And with that, I'll hand the call back over to Shankh.

Shankh Mitra

Thank you, Tim. As I reflect on the current state of the industry, I'd like to reiterate a point I've been making for years, which is plainly stated on our website itself. And that is, we believe there is no data in the business of Sinai. This is not a homogenous industry. The cyclical postcode pounds in occupancy we have witnessed across the sector has masked the fact that rising tide does not live or goals. We're now entering a period in which pricing power should become an increasingly important driver of performance as occupancy is 90% reflecting a simple reality. In a consumer-oriented business, differentiated premium product commands pricing power, that commodity product simply owned. .

Looking forward, it is differentiated operations and product market fit that will increasingly define revenue growth and thus, margin expansion and cash flow growth. This is where much of the mid-market product may begin to falter. And the early signs of that are already emerging amongst some investor participants. While passive Capital has once again taken an approach, that allocating money to this new fund industry is a short but riding silver phenome, they once again will learn the costly lessen when the returns don't come through. an institutional investor at a conference in Chicago last week asked me how hard can it be given the rising tide? I asked her to check her firm's own track record in the sector over the last decade to answer that question. After all, as Mark and said, it aimed what you don't know that gets you in trouble is what you know for sure that ends. As far as we at Welltower are concerned, we remain obsessive of our product market fit and continue to further hone our portfolio by allocating capital with households instead of gambles.

Our $6 billion asset sale this year with our extreme selectivity that I described earlier, hopefully paints a clearer picture for you, perhaps will be proven wrong and catch phrases like demographics or Silverstone will bail out everyone. Let me make it abundantly clear. We don't think so. The world is becoming more complex, more interconnected and more volatile by the day. Sudden shift in technology, geopolitics, culture and capital that once unfolded over years or decades now can happen in a blink of an eye. These abrupt changes are not simply rewriting the rules. They're changing the game itself, pushing our society and markets into increasingly unfamiliar territory. We welcome these environments and as you may have noticed over the years, tend to thrive in them. Our team performs unusually well in volatile, ambiguous and high stakes situation, drawing on to our grid intellectual curiosity, the humility of a beginner's mind and the temperament of the story.

Perhaps it helps that we operate in a need-based business with enormous opportunity for improvement regardless of the noise around us. Perhaps it also helps that we sit at the center of a deeply human-centric business where our success does not depend on predicting winners and losers across many crosscurrents shaping the markets. Yet 1 broader trend is difficult to ignore. The quiet and steady erosion of human agency in our society today. In an increasingly complex and chaotic world, our -- we are determined to move in the opposite direction. In the moments that matter the most, we want to provide our residents with an attentive empathetic and delightful human interactions rooted in dignity and compassion.

We do not believe future however, uncertain is something that we simply inherit. It is something we have a responsibility to help shape and where we can to build. And with that, I'll open the call up for questions.

Operator

[Operator Instructions] Your first question comes from Farrell Granath with Bank of America.

質疑応答

Farrell Granath

My first question is really around the added commentary and the added slide in your deck when it came to your investment volumes. -- and specifically the execution of the 196 granular deals, your added commentary about the 2027 maturities as well as only executing less than 3% of the deals that you're evaluating? And so when it comes down to it, the question is why as well winning these deals? Is it the pricing opportunity that you are presenting -- is it the operations or platform that you are able to pretty much show in your portfolio? Or is it the co-investing opportunity that you also outlined?

John Burkart

Yes. I think Farrell, it just comes down to reputation, right? I mean we are paying a fair value on the seller's cash flow. And then no one questions the speed, the conviction, the ability to close. And we just bend over backwards to deliver a high-quality transaction experience to whoever we do business with right? It comes down to every step of the way from the speed, the quality, the practical mindedness of how you negotiate documents and how you move on things along. It's just a pleasant experience. And just think about anything you do in life. If you have a pleasant experience with something, you'd like to do more of that, right? So there's a lot of repeat business with folks to do business with. I mentioned a lot of folks are taking OP units as part of the consideration.

So there is a choice to be made where they decide that between Part B or C whose currency do they want to take and the proofs in the pudding, right? You're seeing folks as actions. And we're doing all of this in -- while being incredibly disciplined, right, executing at a very granular level. 196 transactions -- there's a lot of transactions. It's almost 1 transaction closed per business day of the year. It's a lot. But that's -- it's a detailed business. It's a granular business, and we are fortunate to have the data science tools that allow us to have that level of neighborhood level, granular view of an asset and a really strong view on what we can do with the asset once we own it. And so that's how we execute.

Operator

Your next question comes from Vikram Malhotra with Mizuho.

Vikram Malhotra

I guess, Shankh, you referenced pricing power a couple of times and the differentiation. So I guess my question is like if we were 2 years forward, looking back, what would differentiate well from an operating standpoint? And similarly from an external growth standpoint just given your size, are we running into sort of a law of large numbers. So just if you can give us a sense of like what really will differentiate 2, 3 years from now when we look back.

Shankh Mitra

Thank you, Vikram. So a couple of things I would mention. First is if you -- let's start with the first question, which I think is the most important one. I think we have obsessed, if you sort of think about last 10 years to completely change this company, the portfolio from selling tens of billions of dollars of assets and then building a significant data science platform that doesn't exist in the business of commercial real estate to really focus and hone in on micro markets, understand syco graphics understand sort of driving pattern cell phone data, all of these to come together of what we think where we can offer with our operating partners, the premium operating partners and exceptional performance. .

For that performance, these discerning customers are willing to pay. It's very important that you understand that people have choice. If they're choosing to live with us, that's a responsibility we have to deliver that premium service, that premium product. And for that, people are willing to pay. And that will become a differentiator as you sort of think about the easier occupancy growth story is increasingly behind us as the industry fills in. And sort of that's the most important point. And you could recall that last year on summer, I said this on this call as we get closer to sort of end of '26 and the industry sort of gets to 90%-plus occupancy that will become the main driver. And I'm glad that, that is happening. We have not seen roughly 11 years of doing this a better pricing environment that we saw this summer, this fall, right? So this is very important, but very importantly, for a discerning customer, they will only will be willing to pay that for a discerning product and service offer. That's the first one. The answer to your first question.

The second question is an interesting one, which is a sort of a size point. If our goal was the size of a balance sheet or size of a company, I 100% agree the idea of say, smaller balance sheet relative to a larger balance sheet would be the right way to think about it. And frankly speaking, the reason that a lot of people think about it is the historic triple-net nature of this business. But remember, that's not our goal. Our goal is to drive per share cash flow and earnings. And the partial cash flow or earnings it's really driven by from our standpoint of what we own and not what we can buy, right? So it's a different understanding. That's what I mean. This is clearly a shadow bank mentality and I understand why that's the case, right? But understand our ability to drive post closing, our ability to drive cash flow is what drives that a share earnings or cash flow. If would never buy another asset, I'll be completely fine. I hope that answers your question.

Operator

Your next question comes from Ronald Camden with Morgan Stanley.

Ronald Kamdem

Just thinking about the total occupancy of the portfolio, it's still at 88.3%. Obviously, I appreciate acquisitions are coming in. I know historically, we've talked about the 95%-plus occupied cohort I guess I was curious, number one, we could get an update on those. And number two, if you had a view of what the structural vacancy of the portfolio is.

Shankh Mitra

Yes. So let me try to answer that question. First is when I'm really emphasizing on price, that does not mean that we think that occupancy growth is not aware of us. We believe that this -- we have a very significant number of -- or percent of our portfolio is about 90% occupied, and we believe there's no reason we cannot take the whole portfolio out there if we freeze the portfolio where it is today, right? So you made the point that, obviously, as we buy, as Nikhil said on the call, this quarter's acquisitions were 66% occupied. So if you think about mix shift aside of product coming in to freeze the portfolio today. There is no reason that we would not be able to take the whole portfolio there. What was the other part of the question around that I did not answer. .

Ronald Kamdem

Performance of the 95-plus percent cohort, how that's sort of trending?

Shankh Mitra

The performance of the 90-plus percent of the cohort had RevPOR growth above 6% and NOI growth of about 21%. .

Operator

Your next question comes from Michael Goldsmith with UBS.

Michael Goldsmith

Shankh,it seems like capital doesn't appear to be the constraint today and the acquisition opportunities seems to be expanding. So as you think about Welltower over the next 5 years, what ultimately becomes the binding constraint to compound your cash flow? Is it acquisitions? Is it operating partner capacity, WBS, just trying to get a sense of what we could prevent that constraint from becoming the bottleneck.

Shankh Mitra

Yes. So I want to be -- I think I was trying to answer that question when Vikram asked it. I want to be abundantly clear. Acquisition -- first is we're not capital constrained, we're opportunity constrained. If we're not opportunity constrained, we wouldn't be deselected, right? A selective what suggests to you that we are extraordinarily focused on the long-term pricing and sort of opportunity to compound cash flow. So we see everything that happens in this business, right? And then we see majority of it before anybody else sees it. That's how you get to 90-plus percent of sort of off-market opportunities or market execution that we had in this business.

So capital is not a constraint opportunity is the constraint, right? So -- but if you just think about that, your question is more focused than if you think about next 5 years of compounding of cash flow, which we define as per share cash flow, not just cash flow, right? It will be entirely dependent on our execution of our existing portfolio. What we are able to achieve on a Volta business system perspective, while our operating partners are able to provide an exceptional product and a service to a very discerning customer, it will be that. It will not be about whether we can buy or sell another property.

Operator

Your next question comes from Juan Sanabria with BMO Capital Markets.

Juan Sanabria

Just hoping, Nikhil, maybe you could talk a little bit about the SNF investments that you made the trends in kind of price per unit or yields the opportunity set and the competitive dynamics with higher rates in the market today. .

Nikhil Chaudhri

Yes, Juan. So it's about $850 million across 8 different transactions, 4 different states, the 100% off market. And rent yields in skilled nursing have always been around the 9%, right? So that's where they are. Then the question is, what's behind the scenes, what's the risk exposure. And as you've known, we've been executing on turnaround skilled transactions for many years now and have a really good track record in doing that. So there's more of the same. A lot of the former Integra subtenants, 20-plus different operators that we've got good relationships with and have had a lot of success together. They're consistently feeding us opportunities. And based on that, we evaluate and see what makes sense for us to execute. One new trend we're starting to see is we're seeing HUD for the first time, imposed single borrower limit on how much capital they will finance for any particular person through HUD.

And with that, obviously, a follow-through effect of that is if how to shut for some owners, then the bank market will pull back because their takeout is gone. And so what you're seeing is a lot of high-quality portfolios with a lot of trapped equity given the value appreciation and the improvement through operations that they just are not able to tap -- and so that's a new type of environment or a new type of transaction that we're seeing. We'll see what comes of it, but that's a relatively new trend that we started seeing over the last couple of months.

Operator

Your next question comes from Nick Yulico with Scotiabank.

Nicholas Yulico

I was hoping to hear how the performance of the same-store pool is in SHOP? And just wondering because the metrics, I know it's helpful you guys give those metrics in the sub, but they are kind of lagging on occupancy margin growth. And I know it's not perfect since the pool is changing. But maybe you just talk about the performance there relative to the same store and also whether the U.K. and Canada how those are -- those acquisitions are performing since -- I think they're going to start entering the same-store pool over the next year.

Tim McHugh

Yes. So I'll start with that, Nick. So I think we enhanced our disclosure this quarter with our nonsame-store properties, and I think that's what you're kind of referencing. I think there's 2 things going on in that pool, you should be cognizant of when there's developments had open. Those are all sitting in there thinking about size impact, I think about margin and occupancy? And also for the second straight quarter, Nikhil highlighted how we're actively seeking out and successfully buying low occupied assets. So those are rolling in. If you ship those out and look at the assets that have been in the pool for kind of like-for-like periods, closer to 90 basis points of sequential occupancy increase. So we continue to see performance in this pool of assets that's in line with what we have in our what we see in our same-store portfolio. And I think in regards to kind of geographic portfolios, we continue to be very optimistic on how they're going to play out in 2027.

John Burkart

And just, Nick, just see Tim's comments in light with the disruption that comes with operator change, right? Everything we're buying, we're effectively changing operators so that disruption is also there, which is we don't mind taking disruption if it is the right decision for the communities in the long term. But those assets are performing well, and we think there is obviously significantly more upside over next few years as you lease up those assets and then get into sort of the trend where you get pricing as a bigger opportunity for growth. .

Operator

Your next question comes from Nick Joseph with Citi.

Nicholas Joseph

How are you thinking about the magnitude of the pricing power opportunity for the portfolio? And then what metrics do you focus on to understand pricing power for an individual unit?

Shankh Mitra

Yes. So Nick, one of the important things as you think about RevPAR is a combined pricing units of many different types of pricing you have to think about. If you think about sort of existing customer rent increases, I have a long-standing belief that I wrote in our last annual letter in a section called trade-offs that we will not supportive of significant customer rent increases, beyond sort of, call it, high-single digit because we just don't want to do that. And we believe that ultimately, running a portfolio below market is very good for us. It's not a problem. -- right? We're not in a hurry. At some point, we will get that unit, and we will get the unit back to the market. So if that's the case and RevPOR is accelerating through the year, which really shouldn't happen, given that majority of the customers get their rent increases in the beginning of the year, that gives you with 1 idea, right? What has changed? What is different is street rates, right?

So if ECRI remains relatively same, you get most of your ECRI at the beginning of the year and only thing that changed your street rate. So we are seeing meaningfully change, enhanced retreats as customers are as designing customers are increasingly realizing the differentiation of product and services that our premium operating partners provide. And as I said, that at least 11 years of this team doing this, we have never seen a better pricing environment that we see today.

Operator

Your next question comes from Mike Mueller with JPMorgan.

Michael Mueller

I appreciate the new export disclosure in particular. Curious, can you talk a little bit about the runway for keeping that growth sub-1% we are today or even sub 2%.

Shankh Mitra

Mike, we're not going to anchor ourselves to a specific number. But as you know, there are 2 things at play. One is there's a relatively large fixed cost component of the business. So operating leverage does matter. That is generally for the business. But for us, specifically, Welltower Business System is a very, very specific driver. If you just think about how the industry works, you get sort of flat files from -- on a monthly basis from the operators and the relatively high level numbers versus you think about when the communities sit on our side of the ledger, you can understand every detailed line item all the way through where the invoice sits, right?

That sort of gives you an opportunity to understand different cost items on a granular basis and then think about what is necessary versus not or how you optimize that. It's a line item by line item conversation. It's not a broad line item conversation. So -- and that's what our team is focused on with our operating partners to see where the business as did get really transformed by technology and systems what part of the business side can be enhanced. That's obviously completely different from the care side of the business, which we have, which is the people side, which we have a very, very clear idea, which is we want the best talent, and we're willing to pay above market for the best talent. So that's different, right? We're focusing on the business side versus the people side. Hopefully, that gives you a sense of how we're thinking about this.

Operator

Your next question comes from James Feldman with Wells Fargo.

James Feldman

Great. I mean I know the market seems focused on some of the core drivers, occupancy RevPOR today in the stock move. But maybe just taking a step back because I know, Shankh, whenever we speak to you, it's all about earnings growth, long-term growth -- can you just talk more about -- 1 of the comments that stuck with us that you made is just how fast things are changing. Clearly, geopolitically lost changing sovereign debt balance sheets are changing -- can you just talk about the long-term view of expansion of the business across the globe, where you think the long-term growth opportunities might be or even domestically, where maybe macroeconomic is changing across geographic markets as well as you think about the long term?

Shankh Mitra

Thank you. So if you just think about this, we truly believe in expertise, right? Remaining within someone's circle of competence is an extraordinarily important concept for us. As you have seen that we have effectively sold out on most of the businesses and have focused on a very, very narrow set of businesses. This narrowing of focus is an extraordinarily important for us. So you can be rest assured that we are not looking to go in different countries, right? We just -- that's without a question. Even within our own say U.S., we are a prolific investor right? We have a very focused product market fit, and that's what we're saying. In fact, we are becoming more and more selective about what product market fit that we're after and her focus narrowed the business meaningfully into 1 idea, right? So you just think about -- so from our standpoint, we made our bets. -- from what product we want and where we think that we can do well and provide a strong value for our customers, while still provide a strong value for owners Beyond that, we have no interest.

So that -- then that's just a question of, okay, in this environment beyond sort of what's going on in sort of the macroeconomic and basin to others, how do you drive additional value, and that is where we are doubling down and tripling down every day in our investments in technology and people and how we transform the business. And that, I think, will be the biggest driver of the business going forward.

Operator

Your next question comes from Omotayo Okusanya with Deutsche Bank.

Omotayo Okusanya

Just wondering if you could talk a little bit about the growth opportunities in your other asset-light fee income-driven businesses, specifically the funds business and licensing of the data of the data science platform, just interest in those 2 platforms, how you expect it to kind of grow over the next 2 to 3 years? .

Shankh Mitra

Yes. So in the capital-light business, we added some additional disclosure in our sub, and you'll see we expect that the revenues from that business should continue to go up. We've had an incredible start to our fund management business. I think I previously described the full deployment of our first equity fund the raising of a credit fund that's going well, and we're raising a subsequent equity fund on data science partnerships. We're in conversations with many groups -- we're making good progress there as well. And you'll continue to see progress in those in the sub as we keep getting more things completed.

Operator

Your next question comes from Jim Kammert with Evercore.

James Kammert

Apologize if line here. Are you willing to disclose kind of the current shop -- pardon me, wellness housing NOI contribution as a portion of the total and the margin for the wellness housing?

Shankh Mitra

It's about 10% of the SHOP portfolio. margins is in the mid-50s Jim. .

Operator

Your next question comes from Rich Hightower with Barclays.

Richard Hightower

Question on dispositions. I know Shankh, you've mentioned several times that obviously, product market and fit are sort of critical components to the portfolio that you would retain over time. So is it safe to assume that whatever has sort of been sold this year somehow doesn't check 1 or more of those boxes? And then also, could you add a little context around the recent Brookdale transaction that was made public earlier this month.

Tim McHugh

Yes. Look, I think on the dispositions, a decent amount of the numbers you're seeing is the medical office transaction that we talked about last year that's obviously closed in tranches as we've gotten ground leisure and tenant approvals. But look, in general, our view on dispositions is that if we think certain assets are optimized or will not keep up with the growth of the rest of the company, just like the disposition of a significant portion of our medical office business, there's other hands that find more value in them and that's a good thing, right? So that's how we decide what we're keeping more what we're selling. It's all dependent on what the contribution it has to the go-forward growth of the company. And what was the other question?

Richard Hightower

Brookdale.

Tim McHugh

Yes. I think the Brookdale transaction obviously is 2 public companies, and there's disclosure out there, but it's a win-win transaction, right? I mean I think from Brookdale you should ask them, but they have a strategy of continuing to want to own more of their assets. And our general view is we want to own senior housing assets in equity structure RIDEA wherever we can. And for the subset of assets, it made sense for Brookdale to continue on with their plan of wanting more assets, and we were happy with the price we got. And so it was a win-win transaction.

Operator

Your next question comes from Austin Wurschmidt with KeyBanc Capital Markets.

Austin Wurschmidt

Shankh, you've spoken about the importance of product, demographics and wealth and kind of the benefits that that's going to have on pricing power as the occupancy growth kind of hands off to higher RevPAR growth. But you've also said that development really only pencils at the high end. And I know there's virtual very limited amount of new starts today, but any concern that when supply ramps that it will be at that higher end and luxury side of the business and limit your ability to push rate? .

Shankh Mitra

So if you think about it, supply, while it makes economic sense today, which I have seen very few, right? If you just think about it is with all the talks of supply, and the best development pitch that somebody has given me at the NIC conference was a 7.5% trend. I will tell you that in our books is a negative development spread. We can do untrended acquisition is today that is in high 7 lots after we buy an asset and then improve cash flow. So the returns are clearly not there. But where it would make sense is will be where you have unlimited pricing power, such as Brookline? The thing is that if you go and try where supply probably would make sense, say Cupertino, say Brookline -- that's why it will take you a decade to actually get the supply. .

So it will make sense for somebody. Let's say, you want to build an asset in Cupertino. And I actually might make sense on a spreadsheet. The caution is right? So we do not believe that we're going to live in a world that will be oversupply in Cupertino. And if that happens, we're willing to live through that, because we do believe that that's where you will have the best pricing power. But anything is possible. I don't consider that as probable.

Operator

Your next question comes from Michael Carroll with RBC Capital Markets.

Michael Carroll

With the comments in the prepared remarks that Welltower's portfolio is starting to transition to more RevPOR gains, from occupancy gains. Now I understand that RevPOR should pick up when occupancy gets into that low to mid-90% range. But is this RevPOR increase similar to the incremental scaling you get from occupancy gains I guess I'm just trying to understand, does the spread between RevPAR and expor, does that hold steady as you start to push RevPOR aggressively when occupancy kind of gets up into that low to mid-90% range. .

Tim McHugh

Yes, Mike, what we're seeing right now in the portfolio, and this is why we kind of talked about it from where we see our assets 95% plus occupied. And as that makes up a bigger part of the pool now is about 35% of our total properties in the same-store pool. It just gives us a good view into how assets will perform or how more of the portfolio performed hits that level. and we are seeing RevPOR expor spreads there that are comparable that greater than what we see in the rest of the portfolio. .

Shankh Mitra

Mike, I personally, this is obviously -- I personally think that obviously pricing has a bigger impact on flow-through margin, right, not necessarily we're just thinking just RevPOR expor. You've got the answer from Tim. But on the margin, whether it's from a dollar of revenue from occupancy versus pricing, you will have bigger impact if it comes from pricing on flow through margin. So if you think about the total dollar of profitability, that absolutely is go shifted higher as you sort of think about more pricing than occupancy. And that's sort of what the comments came from. And you saw that in this quarter's numbers. And I think you will see that as sort of next few years play out. .

Operator

Your next question comes from Richard Anderson with Cantor Fitzgerald.

Richard Anderson

Great quarter. I wanted to go back to Nikhil's comment around Genesis and the lessons that will stay with you for a long time. Can you just talk about what those lessons are specifically and what you won't do again in context with that Genesis situation? And maybe you can also extrapolate that to other swings and misses that you might characterize other transactions in your past and how that informs you going forward?

Shankh Mitra

Rich, I will let Nikhil answer that question, but I would be particularly focused on the framing of that question you had, which is what we wouldn't do again is not the right framing because we did not do Genesis. Our predecessor company did, and it will start with not making $600 million loans to a broken balance sheet would be a good start. Nikhil, I will let you answer.

Nikhil Chaudhri

Yes. I think, Rich, beyond chunks kind of my long thunder, don't make a problem by -- make it bigger by lending to it. But look, I think our initial reaction of skilled nursing when we were starting to clean up Genesis was that it's a bad business. But it's a bad business where you cannot get decent skilled mix. It's a bad business where unlike the senior housing business, where if you make a building beautiful, you spend money improving the quality of it, you have a good reputation, you have good relationships that none of that matters at the end of the day, you're going to have a building that just has a 10% margin for lack of better terms, right? But then as we dug into, I think, the preferred equity investment we made was one of the best things we did as a company, small check, but we did a joint venture with one of the operators that had a really good track record. And we just out of intellectual curiosity, we said, why is it that if you try to sell some assets, 10 folks show up or try and buy assets.

Folks have made a lifetime worth of living by buying assets from Genesis and other similar companies and turning them around. I mean you saw what we did with the Integra portfolio of the former ManorCare assets. So it was just digging into the business not being a bad business as we originally thought. It came down to execution. It came down to specific cities on how you manage the business, how you manage hospital relationships, operating expenses. And if you do enough things right, it can be a good business, right? So those are the big things we learned. And we had to keep questioning our own biases. We had to keep questioning our own views, but we did that through data through incremental information. And as the facts change, our views changed. And that's what you are.

Operator

Your next question comes from Michael Stroyeck with Green Street.

Michael Stroyeck

Can you just touch on the senior housing transaction market and valuations across the U.S., U.K. and Canada, -- where have you seen the most repricing in recent months? And can you just give us some sense for the magnitude of repricing that's occurring relative to, call it, 3 or so months ago before rates ran up a bit?

John Burkart

Yes. Look, I think it's probably too soon to see significant repricing. There's always a lag between what you see on the Bloomberg screen versus what you see in the transaction market. But what you are seeing is folks value certainty folks be concerned about retrades, folks be concerned about the ability to close that is starting to show up. I mean if you look at the acquisitions we had in the third quarter, 66% occupied for newer vintage assets, why did people decide to sell those assets? They decided to sell those assets because in their head, they had a view as developers that interest rates are coming down. And then the Fed change course and now it's starting to become a foregone conclusion that there will be more of that. And so then the response to that was if I can get a reasonable number from my asset, I will not try to stay the course, wait the year to fill up the buildings and try to maximize the outcome. -- right?

So it's that change sentiment that folks are saying good enough is good enough, and let's go to a high-quality counterparty. And maybe we can participate in some of the recovery that we're leaving behind through taking some OP units -- so you're starting to see all of that.

Operator

This concludes the question-and-answer session and will conclude today's earnings call. Thank you for joining. You may now disconnect.