Welltower Embraces Shop Growth, Data Science As Senior Living’s ‘best Years’ Lie Just Ahead

Senior living REIT Welltower (NYSE: WELL) closed 41 transactions in the first quarter of 2026 totaling $3.2 billion, all part of the company’s currently aggressive investment strategy.

Welltower sourced the deals off-market, which added 37 communities totaling more than 4,200 units to the Toledo, Ohio-based real estate investment trust’s (REIT) senior housing operating portfolio (SHOP).

Already in the second quarter, Welltower has closed on $4.2 billion of transactions, primarily the completion of the company’s previously announced acquisition of Amica Senior Lifestyle’s portfolio in Canada.

As the REIT grows its SHOP segment, the company also is reporting continued improvement among the operators that manage it. The company in 1Q26 reported occupancy gains for the segment, even as it has upsized it by adding more than 500 properties to it in the last year.

The company’s operating partners have grown occupancy at or above 95% in roughly half of its SHOP properties. That segment alone contributed more than 20% of NOI growth in the first quarter, a “remarkable” statistic, according to CEO Shankh Mitra.

As he has noted before, Mitra said he believes “the best years of this business are squarely in front of us.”

“With the total senior housing portfolio occupancy at 87%, there is significant capacity in the system for us to drive multiple years of outsized occupancy gains, along with continued pricing opportunity,” Mitra said. “And with the operating leverage inherent in our high-fixed cost business margins should continue to drift higher.”

Mitra said that despite those positive results, he is most excited about how technology, data and innovation will help the company grow its bottom line.

“We have a long and hard year of execution in front of us, but our team has never been more fired up as it is today,” he said during the earnings call Wednesday.

BMO Capital Markets analysts John Kim and Juan Sanabria noted Welltower’s “robust” investment activity and invoked a line from the film Scarface to describe the REIT: “WELL continues to exceed by excess,” they wrote.

Welltower stock dipped about 1% Wednesday, landing at $212.09 by the time financial markets closed.

SHOP leads the way in Q1

Welltower’s SHOP segment continued to gain occupancy and margins during the first quarter of the year.

Occupancy for the total 1,689-community SHOP segment registered at 87.3% in the first quarter of this year, representing a gain over its reported 85.1% total occupancy rate in 1Q25, according to Welltower’s latest financial disclosure.

Net operating income margins for the segment grew to 27.7% in the first quarter of 2026, and the segment exceeded $3 billion in annualized in-place NOI for the first time ever during the first quarter with its latest results.

Welltower reported same-store revenue growth 9.5% higher in 1Q26 than in the first quarter 2025.

As a result of the continued improvements, Welltower has further upped its guidance for full-year normalized funds from operations (FFO) to a range of $6.21 to $6.35 per diluted share, representing a gain compared to the company’s the previous guidance range of $6.09 to $6.25.

Rising interest in acquisitions

Over the last few years, when Welltower said no to a potential acquisition, it usually “wouldn’t get done,” Mitra said. That has changed in 2026 as more companies circle the market looking for communities to acquire.

“There is a more robust marketplace,” Mitra said. “If we say no, more likely than not, somebody else will end up buying those assets.”

One recent example of that lies with the 11-community Revel Communities portfolio that Welltower peer Ventas (NYSE: VTR) just acquired for $540 million. Welltower had previously examined the portfolio and came away with the notion that it is “high-quality.” But “it was in a structure that was not something we found, particularly at that point, palatable,” Mitra said.

Mitra said he has taken a page from the book of late Simon Property Group CEO David Simon. Simon, who died in March, “was an extraordinary leader,” who knew how to walk away from deals when the time was right, Mitra said.

“When you walk away from a transaction and you do it in the right way, so that you know you’re not burning bridges, you tell people why you walked away. You can still maintain the relationship,” Mitra said.

To that end, he shared how Welltower walked away from its deal to acquire 284 Barchester Healthcare communities in the U.K. not once but twice before it eventually came to terms that worked for both parties. In fact, Welltower walks away from about 90% of the deals that its leaders examine, Mitra said.

“Sometimes, with something like Barchester, we walk away. And eventually it happens when the time is right from a pricing standpoint,” he added.

Welltower paired its acquisitions in the first quarter of 2026 with dispositions and loan repayments totaling $2.8 billion. That total is composed of a $1.4 billion sale of a medical office portfolio, $524 million of long-term and post-acute care property sales and $873 million of loan repayments.

Data science platform a cornerstone of Welltower’s future

Over the last decade, Welltower has executed on about $80 billion worth of acquisitions and dispositions, thanks in part to its ability to scale up its data and machine learning efforts in that time, leaders said during the call Wednesday.

In March, Welltower began monetizing its senior housing data and machine learning efforts in a new strategic partnership with Public Storage (NYSE: PSA), a self-storage REIT with more than 3,500 self-storage facilities across 40 states. Welltower also last year launched a new grant for frontline senior living employees.

These and other similar efforts flow through the company’s data science capabilities.

“These models are enabling the real-world application of AI by accelerating capital allocation decisions of five to nine months to mere weeks, and significantly increasing velocity to market,” Mitra said. “Ultimately, our mission is to scale real estate investing, which is historically with an unscalable business.”

Mitra added that multiple non-real estate and sovereign wealth funds have reached out to to the REIT to explore similar arrangements as the company’s partnership with Public Storage.

“Our phones have been ringing off the hook,” Mitra said. “We have been exploring a lot of opportunities with a lot of people – great real estate companies; many non-real estate companies, such as banks and others; major sovereign wealth funds.”

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