Shankh Mitra headshot
Welltower CEO Shankh Mitra

“We came into 2020 prepared for a plain vanilla business cycle downturn,” Welltower CEO and Chief Investment Officer Shankh Mitra said during the real estate investment trust’s fourth-quarter and full-year 2020 earnings call on Wednesday.

The Toledo, OH-based REIT, he said, was hopeful — with the continued decline in senior living deliveries and starts on one hand, and the aging of the population finally ticking up on the other hand — that 2020 would serve as an inflection point after decades of weak demographics.

The pandemic, Mitra said, was particularly devastating for the senior living business, with the back half of the first quarter, and the second and third quarters, all about preserving long-term value.

“Not that we didn’t have doubts or failures, but we continued to move forward in spite of them, with a steady hand on the wheel and an unwavering belief that we’d get to the other side,” he said.

Welltower focused on four areas of value creation for investors, including operating fundamentals; operator platform enhancements, management contracts, leadership enhancements and building local scale; capital deployment opportunities; and talent opportunities.

That focus, he said, has led to a significant number of requests of Welltower by all asset classes to be a “partner of choice.” The REIT also executed more partnership and pipeline deals in the past nine months than in the preceding five years, expecting to deploy more than $10 billion of capital in the coming years. 

Welltower also took advantage of the market disruptions and added 41 new professionals, along with granting 50 new promotions, in 2020, with an expectation to add additional employees in 2021. 

The REIT is doing “meaningful work that matters, creating meaningful relationships and seeing a new level of positive energy of people who want to be part of this team internally and externally,” Mitra said.

Lessons learned

One of the positives to come out of the pandemic, he said, was a collaboration among peers to work on the industry and operator issues together.

“It’s only in our interest to work together to solve this bigger issue than to work alone,” Mitra said.

Tim McHugh, executive vice president and CFO, said the pandemic made its operators look at cost constructs in a more critical way, given the pressures on occupancy.

“We’ve had feedback from operators in large platforms saying they’ve found ways to do things on the labor front more efficiently,” he said. “When you start to see the business come back, they think there is significant cost savings to the labor model, as far as getting more leverage off of it.”

Long-term demand hasn’t changed and will lift occupancy over the next three to five years, he added. 


More than 90% of the assisted living and memory care communities in Welltower’s senior living portfolio have completed their first vaccination clinics, with second clinics expected to be completed by the end of February or early March. 

Welltower Senior Vice President, Business Strategy and Health Systems Initiatives Mark Shaver said that more than 120,000 vaccinations across the REIT’s platforms have been completed. Ninety percent of residents have consented to receiving the vaccine, and 55% of staff members across the portfolio have consented to vaccination, he added. 

Since mid-January, COVID-19 cases within Welltower’s portfolio communities declined by approximately 55%. About 77% of the senior living communities reported no confirmed cases of COVID-19 in the past two weeks; 13% reported one to two cases, and 10% have three or more cases.

Occupancy remains pressured by a decline in move-ins due to COVID-19 and admission bans across the country. Occupancy in the senior living portfolio declined by approximately 220 basis points (2.2%) during the fourth quarter, to 76.2%. Occupancy declined an additional 180 basis points (1.8%), with occupancy at 74.4% as of Feb. 5.

Welltower executives said they expect the REIT’s senior housing operating portfolio’s average occupancy to decline 275 to 375 basis points (2.75 to 3.75%) in the first quarter of 2021 from the fourth quarter of 2020. 

As of Feb. 5, 88% of the portfolio communities were accepting new residents. The senior housing portfolio saw a 7% decline in move-ins in the fourth quarter compared with the third quarter, with a 40% decline year-over-year. Move-outs increased in that same time period but declined by 15% year-over-year.

Senior living operators had $7 million in COVID-19 expenses in the last three months of 2020 and $68 million total last year. These costs were related to workforce expenses, personal protective equipment and other supplies. 

During the fourth quarter, Welltower’s senior housing portfolio received $9 million in Coronavirus Aid, Relief, and Economic Security (CARES) Act funding under Phases 2 and 3 of the Provider Relief Fund for the assisted living communities, bringing total government funding to $34 million.


During the fourth quarter, Welltower acquired 11 assisted living and memory care communities in the Midwest for $89 million. The communities will be operated by StoryPoint under a new triple-net master lease.

Also during the fourth quarter, the REIT sold a portfolio of senior living properties operated by Northbridge Cos. for $200 million. Following the sale of the six-property portfolio in Massachusetts, Welltower retained a 20% interest in the portfolio.

The REIT has completed $657 million in acquisitions since the start of the fourth quarter, including a $132 million acquisition of a 790-unit portfolio of seniors housing assets operated by Harbor Retirement Associates.

The company also collected approximately 97% of rents due in the fourth quarter from operators under triple-net lease agreements, primarily senior living and post-acute care facilities.