John Burkart
Vice Chairman and Chief Operating Officer at Welltower
Thank you, and good morning, everyone. 2024 was another fantastic year for Welltower and based on our recent results and outlook, there appears to be no abatement in the momentum we are experiencing. For the 4th-quarter, we posted total portfolio same-store NOI growth of 12.8%, driven by our senior housing operating portfolio growth of 23.9%. I'll first comment on the outpatient medical business, which remained stable in the quarter with year-over-year same-store NOI growth of 2%. At some level, the business is boring and yet at another level, it's increasingly stable -- it's incredibly stable backed by top credit tenants with long-term leases delivering consistent returns.
Occupancy during the period was consistent at an industry-leading 94.3% and tenant retention remained strong at 93.6%. As for 2025, we expect another year of stable same-store NOI growth of 2% to 3%. During -- turning to the senior housing operating portfolio. Our streak of unprecedented growth continues, having now posted nine consecutive quarters in which same-store NOI growth has exceeded 20%. We are particularly pleased with the better-than-expected occupancy ramp during the quarter, which equated to 310 basis-points of year-over-year growth.
I would also note that the 120 basis-points of sequential occupancy growth, which Shank mentioned was one of the strongest we have witnessed in any quarter outside the post-COVID recovery. For this strength to be witnessed during a seasonally slow period of the year is testament to not only to the tailwinds driven driving the business, but especially to our proactive and dedicated asset management initiatives, which I'll detail shortly. Revenue growth was strong across property types, but we witnessed particular strength at the two ends of the acuity spectrum between our assisted-living and wellness housing portfolios.
In terms of pricing power, as I noted last quarter, rate growth remains healthy and we expect another year of favorable growth in 2025. On the micro-level, rate growth is clearly impacted by occupancy level by unit type at each community amongst other factors. Therefore, as the assets in the portfolio lease-up, their market rate will continue to rise to reflect the value proposition provided. It's important to realize that the senior housing business is very different than the multifamily business when it comes to funding the payments. The payments are generally funded mostly by assets for the relatively short period of time residents are staying at our communities on average about two years compared to the multifamily industry where rental rates are limited by earned income.
I'd also note that the exponential rise in the value of homes, equity and fixed-income securities and other assets over the past 50 years has provided many seniors in our markets the ability to comfortably afford the cost of senior living, which is much more efficient than home care. Not to mention other benefits of senior living, including safer social and active lifestyles and peace of mind for families. Moving to expenses, we remain encouraged by the trends which we're observing across all line items, but particularly -- particularly with respect to labor.
This is best reflected by Comfor or compensation for occupied room, which increased just 1.2% year-over-year, representing one of the lowest levels of growth in our recorded history. This is largely a function of the significant operating leverage inherent in the business whereby most communities are now either fully staffed or approaching those levels. And as occupancy continues to grow, the need to add additional staff has moderated, leading to higher flow-through or incremental margin. The benefit of the building occupancy continues to be reflected in our operating margins, which expanded 320 basis-points year-over-year, the second-highest level achieved in our history. While we have witnessed a substantial recovery in margins over the past few years, we believe that the runway for further margin expansion remains long.
Not only will we still -- not only are we still well below pre-COVID levels of profitability, but given our expectation for RevPOR growth to continue to outpace export, we expect this margin expansion trend to persist well into the future. Additionally, the operating platform initiatives, which are well underway to optimize our business should serve to further boost our margins while also improving the resident and employee experience. This is no different than what has been experienced over the last two to three decades in many other property types across the commercial real-estate universe. On to our operating platform.
We made great strides in 2024 building a capital team with internal expertise capable of directly executing and/or working hand-in-hand with our operators and vendors. The result has been fantastic. For example, in one case, our elevator experts stepped in and corrected the scope of work-related to nine buildings, recognizing a reduction of 49% in the cost of the work. It's critical as an owner of real-estate to have internal expertise and not be forced to rely on vendors to effectively run the capital decisions on the properties often making short-term decisions.
The team has been strategically taking advantage of the vacant units available as our occupancy continues to rapidly increase to renovate the units in advance of the increasing demand in the coming years. Additionally, they have been executing numerous exterior renovations at our communities and modernizing the amenities where appropriate, including creating wonderful employee breakthrooms delighting our critical team members. The positive impact on our site employees cannot be understated.
In one case, on a property visit, the employees hosted a small surprise party for me, including a special song and dance they had created an appreciation of Welltower's work. After having put $20 billion of capital to work-over the last four years and converting over 100 triple-net leases to, the capital team is rapidly executing capital plans for the acquired and transitioned buildings, which is a combination of value-add as well as planned capital.
Our value-add investment program, like all investments at Welltower is based on an unlevered IRR hurdle. As I've mentioned previously, we expect elevated capital spend for a period -- for a period of ultimately a period of time, ultimately lowering to the ongoing capital run-rate, which should be consistent with other residential properties such as the multifamily REITs. On the technical front, we are in rollout phase with our main site level platform and my team is hard at-work with many other-related workflows that will continue to improve the customer and employee experience and improve the margins of our business.
I'll reiterate what Shank mentioned. 2025 should be another year of exceptional growth and there's seemingly no end in sight. Fundamentals of the senior housing sector remain terrific and our efforts to transform this business through the operating platform are having a profound impact on our residents, employees and operators with the true bottom-line impact soon to follow. As always, a huge thank you goes out to the Welltower team, including our operators for their tireless efforts to transform this business. Finally, I want to recognize the amazing efforts by our operators, site employees and welltower employees responding to the recent disasters, including the Southern California wildfires where they evacuated, transported and relocated residents and provided furnished units to many seniors who lost their homes. Thank you. With that, I'll turn the call over to Nikhil.
