headshot - Welltower CEO and Chief Investment Officer Shankh Mitra
Welltower CEO and Chief Investment Officer Shankh Mitra

2024 will be a year of “extraordinary growth” for Welltower, CEO Shankh Mitra predicted Friday in an annual report to investors.

The year follows a “year of extraordinary achievements” in 2023, he said. 

Same-store revenue growth in the Todelo, OH-based real estate investment trust’s senior housing operating portfolio in 2022 and 2023 was in the double digits, and net operating income exceeded 20%, according to the report.

“And while the impact of the rapid growth of our seniors population on various societal and economic trends is highly complex, the implication for our business (largely residential settings with hospitality and personal care services provided) is rather simple: an acceleration in demand for our product, which we expect will persist for the foreseeable future,” Mitra said.

At the same time, the CEO noted that construction costs continue to challenge new development.

According to a special issue brief by The Weitz Co. prepared for the American Seniors Housing Association, senior living construction costs are expected average 3 to 6% more in 2024 compared with 2023, although costs will vary by market, as the McKnight’s Business Daily previously reported.

“Until the regional banks, which are responsible for the bulk of the lending to the sector,

open up again, supply is expected to remain at bay,” Mitra said Friday. “It appears that the sector may be immune from excess supply for the remainder of this decade.”

Welltower is working to grow by building out its operating platform, according to the annual report.

“The buildout of an operating platform in real estate isn’t a revolutionary concept – in fact,

the seniors housing business is well behind most other real estate sectors that are years (or decades) past the implementation of their own platforms,” Mitra said. 

“And what we are particularly excited about for the seniors housing business is the ability to reduce the amount of employee time and effort spent on basic tasks (think data entry in multiple disparate systems), which can be automated through the right technology, systems and processes,” he added. “Our operators’ time can then be shifted to further improving the already incredible care provided to their residents.”

Welltower spent $6 billion in capital in 2023, with almost half of the related deals closing in the fourth quarter, Mitra noted. He said that he believes this spending will “augment our already favorable per share growth trajectory.”

The REIT remains fixed on the long term, according to the report, and Mitra said he has “never been as excited about the prospects for our company as I am today.”