Welltower Inc.

Customer and revenue · Customer retention and subscription renewal

If our tenants do not renew their existing leases, or if we are required to sell properties for liquidity reasons, we may be unable to lease or sell the properties on favorable terms, or at all. We cannot predict whether our tenants will renew existing leases at the end of their lease terms, which expire at various times.

Strategic execution · Joint venture and partnership risks

Our investments in joint ventures could be adversely affected by our lack of exclusive control over these investments, our partners' insolvency or failure to meet their obligations and disputes between us and our partners. We have entered into, and may continue in the future to enter into, partnerships or joint ventures with other persons or entities.

Legal and litigation · Litigation and legal proceedings

Unfavorable resolution of pending and future litigation matters and disputes could have a material adverse effect on our financial condition. From time to time, we are directly involved or named as a party in legal proceedings, lawsuits and other claims that involve class actions, disputes regarding property damage, care matters and other issues.

Data and privacy · Regulatory investigations and penalties

Non-compliance or alleged non-compliance with laws, contractual agreements or industry standards could result in scrutiny or proceedings against us by governmental entities, regulators, our business partners, residents of our communities, data subjects, suppliers, vendors or other parties.

Tax and financial reporting · Financial reporting and accounting standards

Failure of Welltower OP to maintain status as a partnership for U.S. federal income tax purposes. We believe Welltower OP qualifies as a partnership for U.S. federal income tax purposes. As a partnership, Welltower OP is generally not subject to U.S. federal income tax on its income.

Data and privacy · Consumer privacy and consent

As a result of the privacy laws to which we are subject, our facilities are generally restricted from sharing personal information with any other person, including the owner of a facility, unless certain requirements are met. However, for facilities regulated under HIPAA, service providers are permitted to aggregate data across facilities for analytics and benchmarking for the benefit of the facilities.

Cybersecurity and data protection · Data breaches and cyber attacks

Cybersecurity incidents could disrupt our business and result in the loss of confidential information and legal liability. Our business is at risk from and may be impacted by material cybersecurity incidents. We may be subject to attempts to gain unauthorized access to our confidential data through social engineering attacks or other malicious activity, attempts to interrupt our access to, or use of information technology systems through distributed denial-of-service or ransomware attacks.

Digital transformation and innovation · Artificial intelligence and automation

Our approach to AI presents risks and challenges that can adversely impact our business. AI presents risks and challenges that could impact our business, including perceived breaches or privacy or security incidents related to the use of AI. We are integrating generative AI tools into our systems and our third-party business partners, including operators, tenants and vendors, may also develop or use such tools.

Capital structure and performance · Debt management and refinancing

We may become more leveraged. Permanent financing for our investments is typically provided through a combination of offerings of debt and equity securities and the incurrence or assumption of secured debt. The incurrence or assumption of indebtedness may cause us to become more leveraged, which could require us to dedicate a greater portion of our cash flow to the payment of debt service.

Credit and liquidity · Credit risk and customer defaults

Decreases in our operators' or tenants' revenues or increases in our operators' or tenants' expenses, including as a result of increased labor costs, could affect their ability to make payments to us. We have very limited control over the success or failure of our operators' or tenants' businesses and, at any time, an operator or tenant may experience a downturn in their business that weakens their financial condition.

Market and investment · Asset valuation and impairment

We could encounter unanticipated difficulties and expenditures relating to acquired properties, including contingent liabilities and acquired properties might require significant management attention that would otherwise be devoted to our ongoing business. If we agree to provide construction funding to an operator/tenant and the project is not completed, we may incur unanticipated expenditures to ensure completion of the project.

Geopolitical and trade · Government funding and budget changes

If a partial or total federal government shutdown were to occur for a prolonged period, federal government payment obligations, including its obligations under Medicaid and Medicare, may be delayed. Similarly, if state government shutdowns were to occur, state payment obligations may be delayed.

Natural and catastrophic events · Natural disasters and extreme weather

We may experience losses caused by severe weather conditions, natural disasters or the physical effects of climate change, which could result in an increase in our or our tenants' cost of insurance, unanticipated costs associated with evacuation, a decrease in our anticipated revenues or a significant loss of the capital we have invested in a property.

Natural and catastrophic events · Climate change and environmental impact

A significant number of our properties are located in regions particularly susceptible to severe weather conditions and natural disasters, including hurricanes, wildfires, earthquakes, tornadoes, floods and freeze events in typically warmer climates. Beyond immediate disasters, long-term shifts in climate patterns, such as changes in precipitation and temperature, could result in further physical damage to our communities or a decrease in demand for properties in affected areas.

Organizational and management · Leadership and management changes

We have rights to terminate our management agreements with operators, in whole or with respect to specific properties under certain circumstances, and we may be unable to replace operators if our management agreements are terminated or not renewed. Although we have the right to terminate many of our management agreements, there is no assurance that we would be able to timely source a replacement or that any replacement manager would be effective.

Reputation and brand · Brand damage and negative publicity

Negative publicity regarding the healthcare industry could adversely affect our operations. Healthcare companies, including insurance providers, adult care facilities and others, have received and continue to receive negative publicity reflecting the public perception of the industry. Although we have no direct healthcare operations, we invest in seniors housing and healthcare real estate, and our results of operations may be affected by the amount of negative publicity.

Corporate governance · Internal controls and risk management

Welltower is a holding company with no direct operations, and it relies on funds received from Welltower OP to pay its obligations and make distributions to stockholders. Welltower is a holding company with no direct operations. All of Welltower's property ownership, development and related business operations are conducted through Welltower OP.

Reputation and brand · Esg environmental social governance performance

Sustainability-related laws, regulations, commitments and stakeholder expectations imposed additional cost and expose us to numerous risks. Some of our investors evaluate our sustainability-related business practices, commitments and third-party scores when making investment decisions. The criteria used in these rating systems may conflict and change frequently.

Supply chain and procurement · Raw material availability and cost volatility

Our development, redevelopment and construction projects are vulnerable to the impact and have been impacted by material shortages, labor availability and rates, price volatility and inflation. For example, shortages and fluctuations in the price of lumber, electrical equipment or in other important raw materials have resulted in and could continue to result in delays in the start or completion of, or increase the cost of, developing one or more of our projects.

Core operations · Operational disruption and business continuity

We are exposed to operational and legal risks with respect to our properties that could adversely affect our revenue and operations. Although we have some general oversight approval rights and the right to review operational and financial reporting information with respect to our properties, our operators, managers and tenants are ultimately in control of the day-to-day business of the property, including clinical decision-making.