Welltower

You're probably just sitting there going, "We'll see how this goes, but all, all I know is we've got plenty of powder in play." So, um, I think that's gonna be really interesting to watch.

I will say I, I had a chance to sit down again with somebody pretty high up in Public Storage and had a fascinating conversation about, um, when you really look at what the new CEO there has done from regards to, uh, the CEO of Welltower.

If you're not familiar with Welltower, they're on senior living.

Welltower literally came out on a fairly recent earnings call and was like, "Look, we're no longer just a real estate company.

We're really a tech company wrapped around real estate." And so Welltower's been building a great tech stack for the past 10 years.

Um, they put the CEO of Welltower on their board for Public Storage, and they did a licensing agreement because of their tech stack.

Welltower, bro, and I know you and I have talked about this offline, they have got the entire United States broken down into 10 million, 10 million micro markets.

So literally they can go, like, quarter mile by quarter mile and kind of go, "Yes, no, yes, no." Public now has got access to that.

Uh, so that's, uh, [laughs] that's just not a good place to be.

Uh, the top 10 holdings in the ETF, the, the iShares US Real Estate ETF, are Welltower, Prologis, Equinix, uh, which is a kind of a data center REIT.

Digital Realty Trust, another one, which is a data center REIT.

Simon Property Group, which is malls.

In fact, the Canadian population over 80 is 16% higher than the US population.

The names in the US, I mean, you have Welltower, which is-

Sorry.

There's more...

The valuations in the US REIT space, they're trading at monstrous premiums to net asset value because of these favorable tailwinds.

Mm.

You know, Welltower, which I don't know, has 100 and billion-plus market cap, trading at 120% premium to its net asset value.

That's against our religion.

I think what's even more important question related to that is where do bond yields go? Bond yields have continued to grow, as everybody knows.

Sure, the capital entering the sector Welltower are a very big buyer of very large groups of homes.

In the one by one type purchases that we make, they're much less active in our part of the sector.

It's not so much new capital coming in as some of the old capital continuing to invest.

Welcome to the REIT Report, the show where we break down real estate investment trusts in a simple, clean, and honest way.

Today, we're looking at Welltower, ticker symbol WELL, W-E-L-L.

And this is a very interesting REIT because Welltower is not just another sleepy dividend stock.

This is one of the biggest healthcare and senior housing REITs in the market.

And in recent years, it has turned into a major growth story.

So when you buy WellTower, you are not just buying buildings, right? You are buying exposure to one of the biggest demographic trends in the world, the aging population.

More older adults means more demand for senior housing.

More demand for senior housing can mean higher occupancy, stronger pricing power, and better cash flow for a company like Welltower.

And I'm actually not going to do something AI-related, partly because I think that space is moving very quickly.

I would do Welltower.

And the reason is because if you're asking me to own something for five years without being able to trade it, I want a business where I have unusually high confidence in the duration of the earnings growth, rather than needing to predict the next macro turn or the next kind of technological innovation in AI.

So Welltower, what are they? They're the largest owner of senior housing in the US, and I think the supply-demand setup is exceptionally attractive.

The population over 80 is accelerating, just as new senior construction is actually around its lowest level in more than 15 years.

So at current penetration rates, demographics alone would effectively fill the existing industry capacity over the next few years.

Awesome.

Well, a great story.

Um, so we're, there's still kind of a, a catch-up there.

But the companies, like the publicly traded companies like Welltower and Ventas-

Mm-hmm

... that invest in these senior housing facilities, they're seeing same property net operating income growth in the 15% to 20% range-

I don't know.

I can't-

I might be living in a Welltower senior living facility at that point, so.

[laughs]