Moody's Ratings on Wednesday confirmed Welltower Inc.'s A3 long-term issuer rating and shifted its outlook from stable to positive. In the same action, Moody's maintained the A3 assessment on Welltower's senior unsecured notes and the P-2 rating on the commercial paper program of Welltower OP LLC, as well as the A3 backed senior unsecured rating assigned to HCN Canadian Holdings-1 LP.
The upgrade to a positive outlook reflects Moody's expectation that Welltower will continue to record strong top-line and earnings growth, with the agency forecasting a material improvement in credit metrics over the coming 12 months. Moody's specifically noted the company's financial policy orientation toward organic growth and equity-funded investments to expand earnings, a strategy the agency believes will accelerate deleveraging of the capital structure.
On a Moody's-adjusted basis, Welltower's net debt to EBITDA ratio improved to 3.8x at year-end 2025, down from 4.6x at year-end 2024. Moody's projects further improvement, forecasting the ratio to decline toward roughly 3.4x by the end of 2026. The rating agency also expects Welltower's interest coverage to remain above 5x.
Operationally, Welltower recorded meaningful growth in its senior housing operating business in 2025, with same-store net operating income rising 21.5%. Moody's attributed that gain to higher occupancy, increased revenue per occupied room, and disciplined expense management.
The A3 rating itself reflects a combination of factors Moody's considers credit-positive for the real estate investment trust: a large scale of operations, a portfolio of quality assets, and a high revenue growth mix that blends senior housing operating properties, senior housing triple-net leased assets, and long-term post-acute care facilities.
Moody's highlighted portfolio composition changes that will increase the weight of the senior housing operating segment going forward. Following a recent disposition of the outpatient medical portfolio, Moody's says the senior housing operating segment will represent more than 70% of annualized in-place net operating income.
On the balance sheet, Welltower held approximately $5.2 billion of cash as of December 31, 2025, and had full availability under a $5 billion revolving credit facility. The company does face a scheduled unsecured debt maturity of $700 million in 2026.
Context and implications
Moody's affirmation combined with a positive outlook signals the agency's confidence in Welltower's near-term earnings trajectory and the expected pace of deleveraging under current financial policy. The ratings action covers multiple debt instruments and a backed rating tied to HCN Canadian Holdings-1 LP, indicating consistent credit assessments across the firm's capital structure.