U.S. Markets close in 3 hrs 2 mins
  • S&P 500

    -18.25 (-0.41%)
  • Dow 30

    -135.25 (-0.39%)
  • Nasdaq

    -47.83 (-0.32%)
  • Russell 2000

    -25.88 (-1.14%)
  • Crude Oil

    +1.04 (+1.52%)
  • Gold

    -7.80 (-0.43%)
  • Silver

    -0.38 (-1.58%)

    -0.0025 (-0.2128%)
  • 10-Yr Bond

    +0.0250 (+1.92%)
  • Vix

    -0.18 (-0.99%)

    -0.0013 (-0.0909%)

    -0.0330 (-0.0299%)

    -133.96 (-0.28%)
  • CMC Crypto 200

    -0.90 (-0.07%)
  • FTSE 100

    -53.84 (-0.75%)
  • Nikkei 225

    +265.07 (+0.89%)

Welltower (WELL) Sees Seniors Housing Occupancy Gains in June

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Going by its recent business update, Welltower Inc.’s WELL seniors housing operating (“SHO”) portfolio is seeing a recovery in occupancy. In fact, quarter to date through Jun 18, 2021, the SHO portfolio occupancy expanded 140 basis points (bps), surpassing the company’s initial guidance of around 130 bps gain for the full second quarter. Moreover, total portfolio occupancy advanced 180 bps from the pandemic-induced low on Mar 12, 2021.

Since the beginning of the quarter through Jun 18, 2021, the company’s U.S. and U.K. SHO portfolios reported occupancy gains of roughly 210 bps and 170 bps, respectively. In addition, though the Canada SHO portfolio saw an occupancy decline of 50 bps through the first two months of the second quarter, it was flat, month to date, through Jun 18.

The return of many communities to pre-COVID conditions helped this performance, with move-in activity remaining solid through June. Additionally, strong sales activity is likely to support this tempo in the near term.

Notably, acceleration in vaccinations has reduced resident cases while the relaxation of restrictions has enabled the majority of the company’s communities to restart accepting residents, resulting in higher move-in activity and occupancy growth in recent weeks. The resumption of in-person tours, indoor visitation, communal dining and social activities at Welltower’s communities is also encouraging. In Canada, a roughly 80% decrease in new COVID-19 cases has led to a lessening in occupancy declines in recent weeks.

Besides, the outlook looks encouraging, as historically, the months of June through October denote the seasonally strongest period of lead generation and occupancy gain for the seniors housing industry. Also, the reopening of certain states, where the company has considerable presence, including California and Washington, is raising hopes.

Welltower also expects to receive a total of $838 million in pro rata disposition proceeds through Jun 30, 2021 and an additional $618 million in disposition proceeds in the second half of 2021 from assets held for sale as of first quarter.

In the wake of aging baby boomers, Welltower’s communities will likely absorb vacancy at a faster pace. Amid such encouraging prospects for recovery, the company’s efforts to magnify focus on senior living asset class are commendable. Recently, this healthcare REIT behemoth inked an agreement to acquire 86 communities to be operated by a combined Atria and Holiday entity for $1.58 billion. The move is a strategic fit for Welltower, given the significant cash flow growth scope from the recovery in seniors housing and portfolio reinvestment.

However, expenses might continue flaring up due to additional health and safety measures adopted in light of the pandemic. Hence, amid such rising expenses, the company is likely to witness strain on margins in the time to come.

Shares of this Zacks Rank #3 (Hold) company have gained 29.4% over the past six months compared with the industry's growth of 19.7%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Key Industry Picks

OUTFRONT Media Inc.’s OUT Zacks Consensus Estimate for 2021 funds from operations (FFO) per share moved up 3.6% over the past two months. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Geo Group Inc’s GEO Zacks Consensus Estimate for the current-year FFO per share moved marginally north in a months’ time. The company carries a Zacks Rank of 2 at present.

BRAEMAR HOTELS & RESORTS INC.’s BHR FFO per share estimate for the ongoing year has been revised upward by 4.5% in the past month. The company carries a Zacks Rank of 2, currently.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Geo Group Inc The (GEO) : Free Stock Analysis Report

OUTFRONT Media Inc. (OUT) : Free Stock Analysis Report

Welltower Inc. (WELL) : Free Stock Analysis Report

BRAEMAR HOTELS & RESORTS INC. (BHR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research