Waterworld Capital
Public Markets Commentary
Brookdale Senior Living has more upside than other senior housing names, largely because of its leverage, and is cheap because near-term numbers disappoint. Those numbers are getting back on track. @thecontracap counters that the new CEO over-promised near term and results look messy. x.com x.com x.com
The strong senior-housing tailwind means Brookdale and Sonida probably both work. Brookdale is overlevered with poor older assets, while Sonida is too expensive. x.com x.com
Aging demographics are already delivering senior-housing pricing power for Welltower and Chartwell. Welltower's Q3 senior housing NOI rose 21%, occupancy gained 320 basis points and FFO grew 24.6%; guidance was raised again. x.com
Welltower's risk/reward looks poor at almost 70 times forward earnings, even though senior-housing demand is rising while supply is not. x.com
Welltower's operator and technology overhaul helps explain its growth, but the valuation leaves little margin of safety. Its 2025 annual report describes reworked operator agreements, upgraded partners and a Tech Quad for AI and data science while competitors retreated during COVID. AFFO grew about 18% annually since 2023, with 21%, 17% and 15% growth forecast for 2026-28. At 43.7x P/AFFO and a 1.5% yield, it has one of the richest REIT valuations, pricing in future growth. x.com
Strawberry Fields REIT is the VICI of healthcare REITs, and its discount to peers is irrational. It trades at 9.5 times versus 12–15 times for peers despite 150 skilled nursing assets, 100% rent collection for more than eight straight years and the sector's lowest payout ratio. It has delivered 26% annualized returns since listing. x.com
