Dear Fellow Shareholders,

While current macroeconomic conditions remain highly uncertain with heightened

concerns surrounding economic growth, inflation, and the health of the banking

system, I am pleased to report that Welltower’s prospects have only improved as

we’ve entered 2023. The recession-resilient nature of our business model has been

on full display in recent quarters, with stellar top-line growth being reported from

our seniors housing business just as the economy has shown signs of cooling. To be

clear, we may not be completely immune from exogenous shocks which may surface

and we will not take anything for granted in the current environment. However, we

believe that the drivers of our business are only getting better, setting the stage for

an extended period of outsized growth.

I can confidently say that the future for Welltower has never appeared brighter than

it does today.

UNPRECEDENTED INTERNAL & EXTERNAL GROWTH DRIVERS

Within the real estate space, rarely do companies have the simultaneous opportunity

to drive growth through both operations (internal growth) and capital deployment

(external growth). This is because, usually, when fundamentals are robust, capital

quickly flows to the sector, driving asset prices higher. However, we currently find

ourselves in a period in which organic growth is clearly accelerating and acquisition

opportunities and pricing are growing more attractive for us.

I’ve previously spoken about the rare and powerful combination we are currently

witnessing with a cyclical recovery in seniors housing fundamentals superimposed on

demographic-driven secular tailwinds. I’ll now add another dimension to this equation:

our efforts to optimize the seniors housing business through an operating platform

unlike anything seen in the industry (i.e. structural change or disruption). I’ll touch upon

each of these important drivers below but, suffice it to say, we believe that the result of

this “trifecta” will be what every company should strive for: long-term compounding of

per share growth.

Additionally, while these drivers alone should support sustained growth, we remain well-

positioned to create meaningful value through capital deployment. While the events of

the past year have left many participants paralyzed, we remain active, yet disciplined

allocators of the capital entrusted to us by our shareholders.

As most of you are aware, we are at the precipice of a dramatic shift in the demographic

profile of our country, marked by a sharp acceleration of the 80+ population, a trend that

will persist well into the next decade. Not only has demand within our seniors housing

operating portfolio strengthened on the back of this trend, but the growth of this age

cohort has also coincided with a 10-year low in new construction. As a result, in 2022,

we reported another year of both healthy occupancy gains and pricing power aided

by the largely inelastic nature of our product type. And while we’re undoubtedly

encouraged by the prospects of another year of near double-digit revenue growth in

2023, we’re perhaps even more excited about recent expense trends, with our operators

reporting a meaningful improvement across key line items. And if the Fed is successful in

reining in inflation and John Burkart’s team continues to rack up wins with respect to its

asset management efforts, the pace of improvement will only intensify.

Simply put, the building blocks for a period of strong and sustained net operating

income growth are solidly in place.

Green

Shoots

INTERNAL

GROWTH

2 02 1

Flower

Buds

2 02 2

Full

Bloom

2 02 3

& Beyond

RELENTLESS PURSUIT OF

HIGHER STANDARDS

As I described in last year’s letter, we

are in the midst of a critical initiative

to professionalize the seniors housing

business through the creation of an

industry-leading operating platform. The

process of building out a platform which

encompasses over one thousand seniors

housing properties across three countries

has been exhausting, expensive, and, at

times, downright frustrating. Nevertheless,

it is absolutely necessary. Under the

leadership of our COO, John Burkart, we

continue to attract incredible talent from

outside of the healthcare real estate sector

to drive this imperative. Just a few months

ago, John convinced Jerry Davis, another

prolific operator in the multifamily space,

to join Welltower as a strategic advisor.

Jerry previously spent 30 years at UDR, an

S&P 500 multifamily REIT, most recently

serving as President and COO of the

company. John and Jerry (known as J2),

amongst others, upended the multifamily

sector through the use of technology

and data, resulting in extraordinary

growth for their respective companies

(and tremendous value creation for their

investors). The path we are currently

pursuing is a similar one. And, as our

investors have very well come to know,

we will never hesitate to take the tough

road as long as it’s in the interest of

long-term value creation. At Welltower,

we are relentless in our pursuit of

higher standards.

EXTERNAL GROWTH

2022 was another extraordinary year for

Welltower, as we completed over $4.0

billion of pro rata gross investments across

a wide range of opportunities. As you have

come to expect from us, these deals were

executed in a granular and off-market

manner and completed at a significant

discount to replacement cost.

While we are pleased with our teams’

success in sourcing and executing on these

deals, our opportunity set has expanded

dramatically in recent months – across

property sectors, regions, and up and

down the capital stack. Following the Fed’s

unprecedented monetary tightening over

the past year, distress has emerged across

the commercial real estate space. Yet, few

large participants are able to capitalize on

the opportunity due to significant equity

outflows from core and other real estate

investment vehicles and a significant

tightening in lending standards by most

financial institutions. This confluence of

events has created an exceedingly rare

moment in which seniors housing sector

fundamentals are rapidly improving while,

simultaneously, we are one of very few

companies positioned to deploy capital in

size, at an attractive basis, and with in-

place cash flow.

Ultimately, our capital deployment

strategy, which focuses on buying assets

when they’re out of favor (or with little to

no competition), at the right price, and

in the right structure, allows for outsized

returns with a large margin of safety.

We believe that basis (i.e. price) – not

exposure – is the ultimate mitigant of risk.

And, as always, we will remain disciplined

and patient, but not fearful of taking

bold and decisive action when the right

opportunities manifest themselves.

APPRECIATION

Before discussing the principles which

embody who we are at Welltower, I would

be remiss not to express my gratitude to

Ken Bacon, our Independent Director and

Board Chairman, and to our committed,

experienced and passionate directors who

have served alongside our team. I am also

deeply grateful to the Welltower team,

which I am convinced is the deepest in

the real estate space (and beyond) with

the longest runway ahead. And to you,

our fellow shareholders, I remain humbled

by the trust you have placed in our team

and for your continued support during

both the highs and lows of the past few

years. We have never been as excited

about our future as we are today and look

forward to the journey ahead with you.

GROUND RULES

After a whirlwind period for our Company

and industry, I thought it would be

instructive to take a step back and reflect

upon a simple, yet thought-provoking

question posed to me by a legendary

investor whom I am also privileged to

call a mentor and a father figure: as we

embark on this journey to drive long-

term per share growth, who do we seek

as our investor partners? Because, in his

words, “you deserve the shareholder

you get.” Our management team has

spent significant time considering this

question and has created a set of ground

rules or common principles which form

the philosophical foundation for how

we run the Company – with our ultimate

goal of generating superior returns for

our continuing shareholders on both

an absolute and relative basis. We have

included these principles below.

At Welltower, we believe that stock is the

fractional ownership of a business, not

a ticker symbol. Hence, as an investor,

you are a partner in this business. This

is no different from owning a lemonade

stand or a farm together. We take the

responsibility of managing the business

with utmost pride and promise to always

act in the best interests of the long-term

continuing owners of the Company.

And, because of that, we think you

should know what we represent and, as

importantly, what we do not.

We believe that a great investment has

three characteristics:

1) superior returns

2) lower risk

3) long duration or longevity

While much of the investment world is

focused on #1, we are equally focused

on #2 and #3. We recommend that you

do not invest in our Company unless the

following principles resonate with you.

IT IS ALL ABOUT:

LONG-TERM CAPITAL ALLOCATION

We, as capital allocators, strive every day to create per share value by compounding over

a LONG PERIOD OF TIME. While we hope near-term priorities do not conflict with those

of the long term, practically speaking, we often encounter situations where these time

horizons diverge. It is critical that our investors understand that, at these crossroads,

we will always follow the path to long-term value creation at the expense of short-term

gains. These ideas include:

• An adherence to a capital allocation framework fixated on risk-adjusted total

cash returns (IRRs) through the lens of opportunity cost rather than GAAP

earnings accretion. We will not hesitate to make capital allocation decisions,

which are a drag today but have the potential to create significant value

tomorrow

• Making bold, long-term investment decisions that may not be initially popular on

Wall Street. In fact, you can count on us to do so

• A willingness to sacrifice near-term financial returns for opportunities to build

long-term win/win partnerships which will add significant longevity to our

superior returns. That is, we are focused on sowing seeds for the best long-term

interests of our partnership; not harvesting short-term gains to please Wall Street

• Real estate is a long-term business. It takes at least three years for an acquisition

to play out and perhaps five years for a development to do so. Hence, we prefer

a five-year relative performance measurement period but insist on a window of at

least three years to gauge performance of the partnership

• Our capital allocation decisions today, the power of our platform, and the long-

term value creation we hope to achieve, may not be captured in point-in-time

earnings multiples or NAV but, instead, will be reflected through a long-term cash

flow growth analysis

• Remaining within our circle of competence, which we define as the area where

we can assess and allocate capital with house odds rather than gamblers’ odds.

We invest within the boundaries of probabilities while acknowledging that the

boundaries of possibilities are much wider. We remain humble and remind

ourselves each day that we could be wrong; yet, we are unafraid to look foolish.

This is a game of batting average

MARKET LEADERSHIP AND MOAT

While capital intensive infrastructure businesses rarely possess a competitive advantage,

we firmly believe we have established a deep and wide moat through our data analytics

and operating platform, and uniquely entrepreneurial culture. We focus on fairness and

creating win/win solutions which result in an additive-sum mentality as opposed to the

zero-sum mentality which is prevalent in our industry.

• Over the course of many years, we have built an industry-leading predictive

analytics platform which requires exceptional people, a perpetual supply of

myriad and expensive data sources, and constant evolution. We do not sacrifice

the quality and the depth of the platform because the cost drag may hurt

quarterly earnings. While value remains part of our ethos, we will not hesitate to

invest money in people and ideas which will help expand our moat

• Our proprietary predictive analytics platform allows us to make capital allocation

decisions through a probabilistic framework that is focused on biasing outcomes

in our favor rather than chasing the illusion of certainties

• We are the clean shirt in an industry where re-trading counterparties is the norm.

We believe our handshake is worth more than a contract. This means we will

leave pennies on the table today to earn dollars tomorrow. Our reputation is one

of doing first-class business in a first-class way

• We only engage in businesses with clear market leadership and a differentiated

view of how to create shareholder value. Following the herd only results in

mediocre returns. We seek advantageous divergences in our specific niches

THE PEOPLE

We take great pride in the culture of our organization, with a foundation built on

mutually beneficial solutions where all parties are motivated and incentivized by the

same goals. Everyone is all in. We do not take advantage of our counterparties because

we are a large company with access to an army of lawyers. We believe that just because

you can do something doesn’t mean you should. We treat people the way we want to be

treated - in an old fashioned, Ben Franklin way.

• We aim to attract the best and brightest to our team and we retain them long-

term by providing a meritocracy-based environment that is entrepreneurial,

collaborative, and transparent. We are focused on value – NOT cost – while

rewarding our people. But, in all cases, our compensation structure is very

simple – we eat our own cooking and we get paid a fraction of the profits

generated for our investors

• We believe in bringing in people from industries with higher standards. In

other words, we value a desire for constant improvement and emphasize

kinetic energy over experience and potential energy

• We are all students, continuously learning and applying lessons from

great businesses and capital allocators in all industries. We do not confine

ourselves to Wall Street’s version of real estate or its perception of how a

real estate company should operate its business. There is no complacency

at Welltower; instead we operate with “healthy paranoia” looking to always

push forward and up. Like the Navy Seals, we believe “the only easy day is

yesterday.” Hence if your goal is to solve for a stable and passive exposure, we

recommend you look elsewhere

• Being an extreme fiduciary is our pride; not just our responsibility. Decades

from now, we want to be known as one of the best capital allocators of any

industry. Long-term compounding is what we are truly after

BASIS AND STAYING POWER

We believe the accepted model of investing in real estate – one which is focused

on cap rates – is a faulty and dangerous one (if you don’t know what a cap rate is,

consider yourself lucky). We think there are two metrics which cannot be faked

while investing in real estate:

1) basis (price per unit or price per foot) when buying

2) realized unlevered total returns when selling

Hence, our strong belief that capital allocation priorities should be judged by

these two metrics. And, because we are focused on the long-term and believe in a

handshake business, it is of paramount importance that we have staying power to

see the thesis play out and a balance sheet that no counterparty ever questions.

We absolutely believe that real estate is a leverageable asset class where our

point-in-time leverage may appear suboptimal depending on where we are in the

cycle. However, we want you to understand that in the context of how we operate

our business (i.e. contrarian investment philosophy in a handshake format) we are

required to think about our balance sheet through an entire cycle and not at a

point-in-time.

Best regards,

Shankh Mitra

CEO, Welltower Inc.

RISK AS DEFINED BY PERMANENT CAPITAL LOSS;

NOT VOLATILITY

As mentioned above, one of the hallmarks of a great investment is lower risk. While

many efficient market theory proponents believe that an asset’s risk is defined by its

level of volatility, we strongly disagree. At Welltower, we believe that risk should be

assessed through the lens of permanent capital loss; not volatility. In order to reduce

risk, we seek a large margin of safety in all of our capital allocation decisions – that

is, acquiring assets for less than what it costs to build. We believe it is important to

understand this key point of differentiation between ourselves and others as it relates

to risk. We would also note that a vast majority of our management’s personal wealth

is invested with the partnership as compared to many shareholders who benefit from a

diversified portfolio. In addition to the tomatoes you will deservedly throw at us, please

remember that a permanent loss of capital will likely impact our life’s work and wealth

disproportionately. We are all in with you and highly focused on permanent capital loss;

not winning a popularity contest.

We hope these principles provide you with perspective on who we are and how we think

about creating per share value for our long-term continuing owners. Each day, we strive

to not only be the employer of choice and the partner of choice but also the investment

of choice. We therefore believe it is as important for us to find the right capital allocation

opportunities as it is the right long-term investors.

We look forward to learning more about you and we hope you will about us.