Welltower Inc. (WELL) Q4 2022 Earnings Call Transcript

Welltower Inc. (NYSE:WELL) Q4 2022 Results Conference Call February 16, 2023 9:00 AM ET

Company Participants

Matt McQueen - General Counsel

Shankh Mitra - CEO

John Burkart - COO

Tim McHugh - CFO

Nikhil Chaudhri - CIO

Conference Call Participants

Jonathan Hughes - Raymond James

Michael Griffin - Citi

Josh Dennerlein - Bank of America

Mike Mueller - JPMorgan

Derek Johnston - Deutsche Bank

Michael Carroll - RBC Capital Markets

Steve Sakwa - Evercore ISI

Rich Anderson - SMBC

Juan Sanabria - BMO

John Pawlowski - Green Street

Vikram Malhotra - Mizuho

Operator

Good morning. My sanction is Audra, and I will beryllium your convention usability today. At this time, I would for illustration to invited everyone to nan Welltower Fourth Quarter Earnings Call. Today's convention is being recorded. [Operator Instructions]

At this time, I would for illustration to move nan convention complete to Matt McQueen, General Counsel. Please spell ahead.

Matt McQueen

Thank you, and bully morning. As a reminder, definite statements made during this telephone whitethorn beryllium deemed forward-looking statements successful nan meaning of nan Private Securities Litigation Reform Act. Although Welltower believes immoderate forward-looking statements are based connected reasonable assumptions, nan Company tin springiness nary assurances that its projected results will beryllium attained. Factors that could origin existent results to disagree materially from those successful nan forward-looking connection are elaborate successful nan Company's filings pinch nan SEC.

And pinch that, I'll manus nan telephone complete to Shankh.

Shankh Mitra

Thank you, Matt, and bully morning, everyone.

I will reappraisal 4th fourth and nan twelvemonth and picture high-level business trends and our superior allocation priorities. John will supply an update connected operational capacity of our SHO and MOB portfolios. And Tim will locomotion you done our triple-net business, equilibrium expanse highlights and 2023 afloat twelvemonth guidance. Nikhil, our recently appointed CIO, is besides connected nan call to reply questions.

While we are happy to bring backmost afloat twelvemonth guidance aft 3 years, I'll constituent retired that galore macro and business uncertainties remain. I would urge investors and analysts to attraction connected 2023 exit tally complaint to understand nan net powerfulness of this level and not overly stress nan almanac twelvemonth guidance.

I person mixed emotions arsenic I bespeak backmost connected 2022. As I've described to you successful my anterior calls, our results frankly underwound our anticipation during nan first half of nan year. While we don't for illustration to hole that connected short-term banal capacity arsenic we believe, an due model to gauge our capacity is astatine slightest 3 to 5 years, you should truthful to measurement that [ph] for generating an unsatisfactory return -- full return successful 2022. But remember, a banal is simply a fractional ownership of a business and not a ticker.

We position our chap investors arsenic partners for nan agelong haul and continuously strive to amended nan prospects for semipermanent compounding of this business. In spite of immoderate of nan headwinds that we knowledgeable successful 2022, my squad and I are pleased pinch nan underlying improvements we person seen successful this level and our talent base, resulting successful a beardown rebound of capacity successful 4th fourth and farther improving momentum being carried into 2023.

Our caller advancement is only nan extremity of nan iceberg of galore of our initiatives, will genuinely manifest themselves successful nan twelvemonth -- adjacent twelvemonth aliases two, which I'll spell successful a minute.

While wide macro headwinds persist, we person seen a sizeable betterment successful nan cardinal indicators of nan portion economics of nan business arsenic reflected by disbursal per occupied room aliases EXPOR aliases gross per occupied room, aliases REVPOR.

On nan disbursal front, we person seen important advancement connected addressing definite challenges we person faced complete first twelvemonth plus, astir notably connected nan agency and temp labour situation. In fact, export has moderated to -- successful Q4 to 3.4% driven mostly by a deceleration successful compensation per occupied room aliases COMPOR to 2.6%, nan lowest level we person seen successful our recorded history. At nan aforesaid time, REVPOR, again, nan gross per occupied room, stay a accordant agleam spot for us, expanding 7.5% successful Q4, a clear reflection of beardown pricing powerfulness resulting from our premier locations, merchandise and usability base.

As I mentioned connected our past call, 1 of our largest operators pulled guardant January rental increases successful Q4. Even without that, our Q4 REVPOR would person exceeded 6% plus, reflecting a broad-based spot crossed our portfolio. And while we achieved grounds REVPOR maturation successful 2022 of 5.5%, we expect to surpass this level of maturation successful 2023.

While we achieved an awesome 19% SHOP NOI maturation successful 2022 and expect circa 20% NOI maturation successful 2023, I judge we're only astatine nan opening of a multiyear double-digit NOI growth, resulting from a agelong runway of occupancy gain, complaint maturation and operating separator description . And contempt important macro uncertainty already weighing connected nan fundamentals of galore different sectors, our assurance successful early maturation of our business is supported by nan need-based quality of our plus people on pinch a favorable demand-supply backdrop, which is getting amended each azygous day.

I'm pleased to study that 2023 is already disconnected to a awesome commencement pinch January move-ins up 16% of our '19 levels, representing a meaningful acceleration from nan 4th quarter. Forward-looking indicators are besides showing committedness successful January pinch our full measurement -- circuit measurement crossed our elder lodging operating portfolio is up 25% year-over-year.

I would beryllium wholly remiss to disregard possibly 1 of nan astir important milestones successful nan 53-year history of our company, and that is nan Private Letter Ruling we received, which permits america to some ain and aforesaid negociate independent surviving assets.

The PLR provides america important elasticity successful operating our assets, and its timing coincides almost perfectly pinch nan build-out of our industry-leading operating and plus guidance platform, which John and his squad person been tirelessly moving on. We stay optimistic that farther finance successful our level will not only consequence successful a amended separator floor plan of our assets, but besides will meaningfully use nan third-party operating partners crossed nan elder surviving spectrum, who we take to do business pinch successful nan future. We proceed to spot a tremendous opportunity to professionalize and modernize nan operating broadside of elder surviving business, pursuing our small heart wherever there's mystery, there's margin. And our PLR gives a important ammunition to accelerate nan gait for what Welltower 3.0 mightiness look like. I want to convey Mike Garst, our taxation squad and galore others whose efforts person led to this game-changing achievement.

Before turning to investing environment, I want to item nan summation of Retirement Unlimited, aliases RUI, to Welltower's roster of exceptional operating partner. RUI is 1 of nan champion operating performing elder lodging usability successful nan East Coast pinch nan highest programme value programming and attraction standards. RUI has consistently maintained occupancy levels astatine northbound of 90% and pinch hardly immoderate usage of agency lever complete past fewer years. We announced coming that RUI has assumed nan guidance of our first organization together successful Alexandria, Virginia, pinch plans to meaningfully turn our narration successful adjacent word done acquisitions, modulation and development.

We are highly excited and humbled to partner pinch nan Fralin and Waldron families and RUI’s each prima President, Doris-Ellie Sullivan, and invited them to Welltower family.

In position of different maturation partners, it was precisely a twelvemonth agone erstwhile we announced our business pinch David and Simon Reuben, on pinch their acquisition of Avery Healthcare successful nan UK. As you know, Reuben Brothers is 1 of nan astir sophisticated, forward-thinking and well-capitalized world investors pinch nan estimation of attracting best-in-class talent and exertion platform. Our thesis was validated erstwhile Reuben Brothers attracted Lorna Rose, 1 of nan astir good respected operating -- elder lodging operating executive successful UK to subordinate Avery arsenic nan company’s CEO position successful December. Lorna has spent 25 years successful nan manufacture and was astir precocious pinch Barchester, 1 of nan UK's largest elder lodging platforms.

Next, connected nan superior allocation side, we person seldom seen a favorable situation crossed each our merchandise types successful each 3 countries we do business pinch in. There are 20-plus-billion of exit cue for halfway existent property costs and past possibly moreover a longer 1 for non-traded REITs. This on pinch nan challenging indebtedness market, springiness america an tremendous advantage to bargain nan correct merchandise astatine nan correct location astatine nan correct basis. Please statement that while we are underrunning by much than $0.5 cardinal of EBITDA from pre-pandemic levels, we conscionable reported indebtedness metrics that are amended than Q4 of 2019, on pinch much than $5 cardinal of near-term liquidity -- disposable liquidity. We person galore avenues to entree and deploy superior that I've described before, and we stay engaged connected each fronts. But our North Star remains accordant and simple. We strive to create per stock worth for our existing owners by compounding complete a agelong play of clip wrong our circle of competence, which we specify arsenic nan area wherever we tin measure and allocate superior pinch location likelihood alternatively than gambler’s odds.

With that, I'll walk it complete to John.

John Burkart

Thank you, Shankh.

I'm excited astir our operating capacity this 4th and nan acceleration successful growth, which we've witnessed. My first convention telephone astatine Welltower was successful Q2 of July 2021. Total portfolio same-store NOI was a antagonistic 7.1%. Since that call, nan portfolio's capacity has continued to improve. In 2022, contempt challenges, maturation was successful nan scope of 7% to 9% for nan Q1 done Q3. However, successful Q4, we accelerated a 12.9% portfolio NOI maturation driven by elder lodging operating business pinch NOI maturation of 28.1%, contempt each nan challenges of nan existent economy.

This astonishing capacity is simply a consequence of some nan awesome supply-demand dynamics of nan elder lodging assemblage and fierce plus management. I proceed to spot galore opportunities to professionalize nan business, which are being proven retired done various initiatives arsenic noted successful nan lawsuit studies we presented successful nan descent platform and intelligibly travel done nan financials erstwhile looking astatine nan monolithic betterment successful agency labor, which I'll outline successful a moment.

It is this abundance of opportunity, nan opportunity of applying proven manufacture solutions to nan elder lodging industry, which led maine to chat to my friend, Jerry Davis, and prosecute Jerry arsenic a Strategic Advisor.

As galore of you know, during my multifamily days, Jerry was my counterpart astatine UDR, 1 of nan largest multifamily REITs pinch nan nationalist level of 60,000 flat homes. Jerry spent 30 years successful various roles astatine UDR and astir 15 overseeing each nan company's operations earlier retiring successful 2021. He and I person ever shared akin views that nan operational excellence requires a attraction connected people, processes, information and technology, which, if good done, results successful a superior acquisition for some residents and labor and yet drives stronger financial performance.

We person made important headway complete nan past 1.5-year successful enhancing our guidance capabilities, and Jerry's expertise will accelerate that progress. He’ll attraction his efforts connected circumstantial opportunities while I’ll proceed to build nan broader operating level from plus guidance and operations to capital, assets management, renovation, et cetera, arsenic Welltower transforms nan business. Jerry will thief america to proceed accelerate -- proceed to accelerate alteration successful nan elder lodging industry. Our activity together will not simply beryllium additive, it will beryllium exponential, J squared.

Now, I'll supply immoderate penetration into our operating business, starting pinch nan aesculapian agency portfolio. In nan 4th quarter, same-store NOI maturation for our outpatient aesculapian business was 2.1% complete nan anterior year's quarter. Same-store occupancy was dependable passim nan twelvemonth astatine astir 95%, while retention remains highly beardown crossed nan portfolio astatine 93% for nan 2nd consecutive 4th and astir 92% for nan full year. This robust retention complaint helps america thrust improved lease rates and continued beardown re-leasing rates.

Turning to our elder lodging operating portfolio. The 28.1% 4th fourth NOI summation complete nan anterior year's 4th was driven by gross maturation of 10.3% for nan period. Year-over-year separator maturation of 320 ground points was besides nan strongest of nan year. All 3 regions showed beardown gross growth, starting pinch Canada astatine 6.6%, nan U.S. and nan UK, an awesome 10.6% and 19.2%, respectively.

Revenue maturation successful nan 4th was driven by a 200 basis-point summation successful mean occupancy and different 4th of patient pricing powerfulness pinch REVPOR maturation of 7.5%, which, arsenic Shankh mentioned, is nan highest we've ever witnessed. Sequentially, portfolio mean occupancy continued to amended pinch a summation of 20 ground points during nan period.

Turning to expenses. Agency usage has evidently been a cardinal facet successful 2022 expenses. However, successful Q4 2022, conscionable arsenic Tim had mentioned galore times, agency disbursal is acting arsenic an disbursal deflator. Agency successful our same-store portfolio is down 44% year-over-year successful Q4 '22. We often quote agency arsenic a percent of compensation. So looking astatine it that way, successful Q4 of 2021, agency disbursal was 6.9% of compensation and successful Q4 of 2022, it was 3.7%. Regardless of really you look astatine agency, nan disbursal is declining successful nan U.S. and Canada, wherever complete 90% of our elder lodging portfolio is located. The UK is still impacted by wide labour shortage arsenic good arsenic immoderate rigid staffing models, which person led to little occupancy properties being overstaffed. Management successful nan UK is slow adjusting to a move staffing model, ensuring due staffing astatine various levels of occupancy.

Overall, COMPOR, nan compensation per occupied room, which represents astir 60% of nan disbursal per occupied room, accrued only 2.6% successful nan 4th fourth compared to nan anterior year's quarter, which is nan lowest maturation complaint successful complete 5 years. This moderating COMPOR maturation helped thrust nan deceleration successful wide disbursal growth, contempt continued inflationary pressures successful respective statement items, including nutrient and utilities, which roseate 10.5% and 10%, respectively, successful nan 4th fourth of 2022 connected a per occupied room ground compared to nan anterior year's quarter. Food and utilities correspond astir 12% of disbursal per occupied room.

The operation of 7.5% REVPOR growth, nan highest successful complete 5 years pinch a 3.4% disbursal POR maturation led to singular maturation complaint successful nett operating income per occupied portion of 25%.

Regarding our operating platform, we proceed to beryllium connected gait to aviator our first module successful Q1 '23, pinch respective different modules successful nan works. I must opportunity that I'm purposefully not giving retired nan specifications arsenic they're proprietary. However, I will opportunity that I'm proud of nan imaginative accomplishments of nan Welltower squad and I'm grateful for nan awesome operators that we are partnering pinch connected these first modules.

The successes that we person had done fierce plus management, arsenic noted successful nan descent deck, are nan consequence of brute unit and beryllium nan opportunity. Operational excellence is achieved by a attraction connected people, processes, information and technology, and that is precisely what nan squad has done and nan various initiatives that are outlined successful 3 lawsuit studies connected agency labour reduction, gross guidance and attraction revenue. We will proceed to leverage our squad to thrust results, yet nan top opportunity will beryllium realized arsenic we rotation retired nan operating level successful nan coming years.

Finally, I would for illustration to convey our operators and each their labor and nan Welltower labor for making these results possible. Our teamwork has intelligibly paid off, starring to improved resident and worker experiences and stronger wide results.

I'll now move nan telephone complete to Tim.

Tim McHugh

Thank you, John.

My comments coming will attraction connected nan 4th fourth 2022 results, nan capacity of our triple-net finance conception successful nan quarter, our superior activity, our equilibrium expanse liquidity update, and finally, our outlook for nan twelvemonth ahead.

Welltower reported 4th fourth normalized costs from operations of $0.83 per diluted share, representing 7% year-over-year maturation aft adjusting for anterior play authorities grants and FX headwinds. We besides reported full portfolio same-store NOI maturation successful nan 4th of 12.9% year-over-year.

Before getting into our conception results, I want to supply an update connected our precocious closed ProMedica restructure and nan go-forward reporting treatment. In precocious December, we announced nan closing of our restructure associated task pinch ProMedica Health System and our recently formed associated task pinch Integra Health. The ProMedica Health System JV consisting of 58 backstage salary assisted surviving assets will proceed to beryllium operated nether a lease pinch ProMedica Health System and it is now portion of our elder lodging triple-net reporting segment.

The Integra Health associated venture, consisting of 147 skilled nursing properties, comprised of a spot associated task and a maestro lease pinch Integra Health. The lease commenced upon closing successful December adds to nan first tranche of nan spot JV pinch Integra acquiring 15% of Welltower's liking successful 54 of nan assets for $73 million. As antecedently expected, consequent to year-end, nan 2nd tranche of assets closed successful January, Integra acquired 15% liking successful different 31 assets for $74 million. The remaining 52 assets are expected to adjacent successful nan 2nd half of nan year.

As for nan underlying operations, nan subleasing of nan portfolio is progressing successful statement pinch expectations. 75% of nan beds person already modulation guidance pinch nan remainder of nan portfolio waiting connected authorities circumstantial approvals. We will proceed to update nan marketplace arsenic nan advancement of guidance transitions successful summation to underlying spot level fundamentals.

Now turning to nan capacity of nan remainder of our triple nett properties successful nan quarter. As a reminder, our triple-net lease portfolio sum and occupancy stats reported a 4th successful arrears. These statistic bespeak nan trailing 12 months ending 9/30/2022.

In our elder lodging triple-net portfolio, same-store NOI accrued 4.3% year-over-year and trailing 12-month EBITDA sum was 0.86 times successful nan quarter.

Next, same-store NOI successful our semipermanent post-acute portfolio grew 4% year-over-year and trailing 12-month EBITDA sum was 1.34 times successful nan quarter.

Turning to superior marketplace activity. In nan quarter, we settled $1.5 cardinal of antecedently raised equity done our guardant ATM program, helping to bring indebtedness to EBITDA down to 6.3 times astatine year-end, a important alteration of astir 7 times astatine year-end 2021 and beneath pre-COVID levels of Q4 2019. For nan year, we settled a full of $3.7 cardinal of equity to money $3.7 cardinal of nett finance activity, allowing america to proceed to deploy superior into a desiccated backstage marketplace while materially delevering nan equilibrium sheet.

Looking forward, we ended nan twelvemonth pinch $722 cardinal of cash, afloat capacity connected our $4 cardinal revolving statement of in installments and $383 cardinal successful expected proceeds from near-term dispositions and indebtedness pay-downs, representing $5.1 cardinal successful near-term disposable liquidity.

Before moving connected to our 2023 guidance, I wanted to adhd much discourse to Shankh's earlier commentary astir nan opportunity provided to our institution by past year's Private Letter Ruling.

Nearly 14 years ago, Welltower system first time of guidance agreement, giving a nonstop economical vulnerability to elder lodging operations. Over nan past five-plus years, we built a amended and stronger alignment wrong this contractual structure, yet reaching a constituent successful 2021, wherever we tin make meaningful ROI done centralized quality superior and exertion finance astatine Welltower.

We hired John Burkart and started to build nan squad astir him. The PLR we received past twelvemonth allowed america to meaningfully accelerate that effort arsenic nan ROI clash is wholly removed nether self-management. This Welltower level finance is evident done G&A. With greater than 80% of our expected year-over-year summation successful overhead costs being driven by exertion finance and caller position additions successful '22 and '23, focused chiefly connected plus management, information analytics and technology.

We proceed to judge that nan opportunity to some modernize operations and thrust efficiencies done standard successful our business is immense and creates a sustainably beardown rate travel tailwind erstwhile mixed pinch nan demographic-driven request of nan adjacent decade plus.

Lastly, moving to our afloat twelvemonth guidance, which we are reintroducing for nan first clip since COVID uncertainty began impacting our business successful March of 2020.

Last night, we provided an outlook for 2023 of nett income attributable to communal stockholders of $0.57 to $0.75 per diluted stock and normalized FFO of $3.35 to $3.53 per diluted stock aliases $3.54 astatine nan midpoint. As mentioned successful nan release, our 2023 guidance contemplates nary adjustments for different authorities grants we person successful nan year. So, aft adjusting for $0.07 of nonrecurring authorities grants received successful 2022, we are guiding for 5% year-over-year growth. This year-over-year summation successful FFO is composed of $0.36 from maturation successful our elder lodging operating portfolio and $0.03 from maturation crossed nan remainder of our segments. These are offset by $0.04 of anterior mentioned higher G&A and Welltower level costs and $0.19 of floating complaint liking and overseas speech headwinds. Underlying this FFO guidance is estimated full portfolio year-over-year same-store NOI maturation of 8% to 13%, driven by subsegment maturation of outpatient medical, 2% to 3%, semipermanent post-cute 2% to 3%, and elder lodging triple-net of 1% to 3%, and finally, elder lodging operating maturation of 15% to 24%, nan midpoint of which is driven by gross maturation of astir 9.5%. Underlying this gross maturation is an anticipation of astir 230 ground points of year-over-year mean occupancy summation and rent maturation of astir 6.25.

And pinch that, I'll manus nan telephone backmost complete to Shankh.

Shankh Mitra

Thank you, Tim.

While we ended 2022 connected a affirmative note, it was besides a twelvemonth of sheer grit and perseverance from our team. As we look different challenges successful our business, beryllium it nan disbursal pressure, improvement costs unit aliases ProMedica, we stay patient successful our belief that our occupation arsenic stewards of our shareholders' superior is to lick problems erstwhile we brushwood connected this travel and not rip nan set assistance disconnected and springiness distant imaginable early upside to backstage equity -- to profit from either because, one, it is nan easiest point to do alternatively of moving things retired aliases two, nan emotion connected instant gratification arsenic Wall Street tends to cheer specified decisions.

We spot excessively galore marketplace participants operation up short-term volatility pinch semipermanent consequence flat superior loss. As our partners successful nan business, our investors tin count connected america to return reliable roadworthy to present strongest returns we judge are achievable erstwhile we look challenges. This is evident successful nan build-out of our operating level and our transaction pinch ProMedica and Integra.

To paraphrase Mr. Munger, you tin remainder assured that we person a deferred gratification cistron imprinted each complete our culture, and we punctual ourselves each time that large money is made not successful buying and selling, but successful winning.

Lastly, I'm highly delighted to spot galore of my partners precocious appointed to nan executive and elder guidance roles wrong nan organization, processing nan business fighting it together successful nan trenches, and I'm convinced that we person nan deepest chair spot on pinch nan longest runway arsenic I look crossed nan existent property space. Supplementing this talent is our unmatched information and instrumentality learning capabilities, which allows america to efficiently and costs efficaciously measure caller investments arsenic good arsenic reinvestment successful our portfolio.

In summation to our spot of our existing team, we proceed to pull best-in-class talent from extracurricular nan manufacture who stock our belief that nan early of our business whitethorn look very different from nan past. Simply said, we want to pull talent that comes from nan industries pinch precocious standards.

And to that point, I could not beryllium happier that John has convinced Jerry Davis to subordinate our team. As you each cognize from his galore years successful multifamily sector, Jerry has 1 of nan sharpest operating minds successful existent estate. I person known and admired Jerry for 15 years and cannot beryllium much excited to activity pinch him and study from him. I'm much convinced than ever that John on pinch Jerry will person an exponential effect and toggle shape this industry. If you are aliases cognize personification of that operating caliber and much importantly person an outsider’s mindset from a related aliases frankly unrelated manufacture who wants to subordinate nan formidable squad of J squared, please fto america know. Welltower is wide unfastened for business, not only for plus acquisition but besides for talent acquisition.

With that, I'll unfastened nan telephone up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] We’ll return our first mobility from Jonathan Hughes astatine Raymond James.

Jonathan Hughes

I conscionable wanted to inquire astir nan expanding usability relationships. Obviously, we conscionable saw different 1 yesterday pinch RUI and you talked astir much opportunities -- aliases expected opportunities successful nan future. But I'm wondering what nan scenery looks for illustration aft 3 years of these pandemic headwinds? How galore high-quality operators stay arsenic an opportunity that you don't already person a narration pinch and what's nan size of those individual opportunities? Are they smaller aliases larger successful position of finance measurement than nan relationships established complete nan past fewer years? Thanks.

Shankh Mitra

Yes. Jonathan, you asked a very, very bully question. So, arsenic I deliberation astir -- if your mobility is circumstantial to elder lodging industry, I spot that -- obviously, we person astir of nan operating partners that want to do business which we already do business with. So description of caller operating partners is little of a attraction and going heavy alternatively than going wide is our focus. We are looking for striving for location density pinch our existing partners crossed nan different countries, right?

Now, we have, I mentioned earlier that we person -- location are operating partners successful nan business, location are operators successful nan business that we person admired for a very agelong play of time. And this is simply a agelong making love process. It takes a agelong clip for some parties to understand really we tin adhd worth to each other, right? Capital is simply a commodity. Just capital, america bringing superior to an operating partner, frankly speaking, successful immoderate narration is not enough. And for our perspective, truthful we bring successful information analytics and different operating level initiatives that John is doing to nan equation. At nan aforesaid time, we want to understand whether these operating partners are reasoning astir nan business aliases wherever nan business is going 10, 20 years from now, not wherever nan business was 10, 20 years ago, right? There's a important mind displacement that is needed successful nan business. And frankly speaking, arsenic I mentioned a fewer minutes ago, we request higher standards, higher standards of worker engagement, higher standards of customer work and higher modular of really we dainty superior and what we -- and really we present results for nan capital. And those are nan type of operating partners and business partners that we're looking for, and we're grateful that we person a fundamentally a awesome roster of these group to thrust business with.

Now going to nan 2nd portion of your question, from an finance measurement standpoint, I want to reemphasize, you're going to spot a mostly of nan finance measurement pinch existing partners arsenic good arsenic benignant of nan partners that we person already announced successful nan past mates of -- two, 3 years.

Operator

We'll return our adjacent mobility from Michael Griffin astatine Citi.

Michael Griffin

Maybe conscionable connected transaction activity. I mean, Shankh, I cognize you've ever talked astir really you're an unlevered IRR focused investor. I'm funny if you've seen immoderate alteration and possibly hurdle aliases return rates that mightiness get you much excited astir 1 spot type comparative to another. I cognize you look beautiful affirmative successful your opening comments, but immoderate further clarity location would beryllium helpful.

Shankh Mitra

Michael, if you deliberation astir -- different times springiness america opportunities for different types of product. You person seen america bargain and waste each merchandise that we ain successful last, telephone it, 7 years, 8 years nether this -- nether nan activity of this team, right? So, because different times, you get opportunities to bargain different products astatine a very favorable basis. This mightiness beryllium nan first clip we're seeing crossed each our merchandise type, crossed nan 3 countries that we do business with, we're seeing opportunities, right? This is simply a very, very disruptive clip from not only from indebtedness broadside but besides from equity side. The group who we usually compete against, right, nan halfway funds, nan non-traded REITs and others, everybody is facing very important travel -- outflow, either because of nan denominator effect that you spot successful pension money world arsenic good organization world aliases immoderate different reasons specified arsenic readiness of -- not readiness of indebtedness and different situations. So, we're seeing crossed each merchandise types, we're seeing very important opportunities -- and frankly speaking, an expertise to execute IRRs that we haven't seen successful immoderate of nan merchandise types, frankly, forever.

Operator

We'll move adjacent to Jeff Dennerlein (sic) [Josh Dennerlein] astatine Bank of America.

Josh Dennerlein

I admit each nan colour connected nan plus guidance platform. Just benignant of funny really we should beryllium reasoning astir benignant of is this for illustration nan afloat finance twelvemonth and past payoffs commencement happening successful 2024? Is location thing benignant of built into guidance arsenic acold arsenic for illustration a payoff -- and really are we reasoning astir nan J squared tally complaint for returns?

John Burkart

Yes. I'll commencement and Tim whitethorn want to comment. I'm not decidedly -- for clarity, not commenting connected Tim's guidance. But, I deliberation what we're seeing and what we're trying to show is nan returns are already coming through. I mean, if you look astatine what's going connected from an fierce plus guidance perspective, you spot that successful nan agency move and what nan squad has done, which is tremendous magnitude of blocking and tackling. The further activity that we're doing really relates to scaling those things. And partially why we included that successful nan platform is I came successful and I had a position of things from my gut, you mightiness say, truthful to speak. And I probed astir and sewage confirmation, and past we started workflows and now that that's proving out, and that's what we wanted to show because that is critical. We were right. There is tremendous opportunity here. And nan much I sewage into it, nan much opportunity I see. When you look astatine J squared, this exponential opportunity, it's huge. My position is wherever I'm moving correct now is crossed nan full platform, arsenic I mentioned, and Jerry will beryllium capable to attraction successful connected individual items and execute highest of each levels, which will velocity up our process. So bottom-line is we're already delivering numbers. It will proceed for many, galore years and it yet relates to important separator betterment crossed nan board.

Tim McHugh

I'll conscionable adhd connected cost. We look astatine this arsenic an investment, right, connected nan quality superior broadside and connected nan exertion side. So, you cognize that we tally our level very efficiently, and we don't return nan costs lightly arsenic acold arsenic immoderate further investment. But we deliberation there's a batch of return present connected investment. And so, location is simply a spot of a lag betwixt dollars successful and hires, successful that return. But connected a go-forward basis, I expect america to beryllium very prudent astir it and proceed to show precocious return for dollars spent.

Operator

We'll move to our adjacent mobility from Mike Mueller astatine JPMorgan.

Mike Mueller

Hi. I’m funny what's nan scope of margins that you deliberation nan SHO business could run astatine afloat occupancy, and to usage your term, erstwhile it's afloat professionalized?

Shankh Mitra

Mike, I was conscionable not going to beryllium present and effort to estimate what mightiness aliases mightiness not happen, but I will repetition what I've said before. If we went backmost to pre-COVID occupancy and pre-COVID margin, I will beryllium really disappointed. If that's wherever we end, we'll beryllium disappointed.

Operator

We'll spell adjacent to Derek Johnston astatine Deutsche Bank.

Derek Johnston

In summation to nan REIT community, a batch of generalist investors are intimately pursuing WELL. So, I cognize we touched connected it successful nan opening, but tin you grow connected this favorable Private Letter Ruling pinch nan IRS. I deliberation astir 45,000 independent surviving units are not really being designated arsenic healthcare accommodation and/or taxable to RDEA. [Ph] And truthful what does that mean, right? And importantly, really nan determination whitethorn thrust further net growth, particularly fixed nan beefed-up plus platform? Thanks.

John Burkart

Yes. I'll touch connected that. So, what it means, I deliberation nan easiest measurement to look astatine it is if you conscionable spell backmost and publication history a small spot and you look astatine nan multifamily world erstwhile everyone benignant of came together successful nan mid-'90s erstwhile I started -- wherever I was at. And what you saw is this move from interest managers to proprietor operators was a basal shift. And what I deliberation a batch of group missed was location was a basal economics down that. In essence, arsenic a interest manager, you get paid a percentage, let's say, 5% to cod $1, and that intends you wouldn't walk much than $0.05 to cod nan dollar; arsenic an proprietor usability you paid $1 to cod $1, truthful that's -- you would walk $0.99 to cod $1. And truthful that basal displacement enabled america arsenic proprietor operators to move much, overmuch faster and changed really we looked astatine nan world, whether it beryllium investing successful websites, technology, et cetera, aliases bringing things in-house, trading in-house, et cetera. All these things enabled a tremendous betterment successful margins. And that's what it yet intends is it will let america to measurement into that business and person tremendous effect connected nan margins. More than that, I would say, I break nan business down into 3 components overall. There's a existent property aliases multifamily component. There's what I telephone nan hospitality component, which relates to meals, housekeeping activities, and past there's a attraction component. And so, our various residential businesses person 1 to 3 of those parts.

So, arsenic we measurement in, we reside nan existent property arsenic good arsenic this hospitality constituent astatine our independent living, we'll beryllium capable to return those champion practices and move those into nan assisted living, which we're evidently not managing. But if we find amended ways, much effective ways to present higher value repast service, et cetera, that will each beryllium pushed retired done our platform, nary different than what we're doing correct now successful our lawsuit study connected gross management, really we push that retired to 1 of nan assisted surviving properties. So, nan aforesaid conception will apply.

So, this is beautiful huge, and it will effect our wide residential platform.

Shankh Mitra

I'll conscionable add, Derek, 1 point to that. Just arsenic I mentioned before, we're moving towards location density and going heavy and not going wide pinch our existing partners, right? So, deliberation astir it, I don't know, conscionable -- you will spot nan early is pinch our prime operating partners, strategical partners, we're going to person bigger density aliases higher density and a bigger standard successful a marketplace and pinch our finance successful nan exertion level and nan operating level pinch our operating partners, nan expertise to execute connected nan crushed I think, again, this is going to beryllium not only a awesome triumph for our owners, our assets, but besides a awesome triumph for nan prime operated partners that we'll take to do business pinch going forward. So, it is simply a very overmuch of a attraction connected win-win, and that's nan measurement business sewage to be.

Operator

We'll return our adjacent mobility from Michael Carroll astatine RBC Capital Markets.

Michael Carroll

How has Welltower's narration changed pinch its existing independent surviving operators since nan PLR announcement? I mean, are they much consenting to activity pinch Welltower, fixed definite goals aliases targets, aliases has location been immoderate noticeable alteration since that was announced?

Shankh Mitra

The guardant reasoning ones who are reasoning astir wherever nan business needs to spell 10 years from now, 5 years from now, 15 years from now, has travel guardant and want to participate successful building retired nan level together. The ones that are holding connected to nan conception of what nan business was successful nan ‘90s are intelligibly realizing their early is not pinch us.

Operator

Next, we'll spell to Ronald Kamdem astatine Morgan Stanley.

Unidentified Analyst

Hey. Adam connected for Ron. Good morning, guys. Just wanted to inquire astir nan ProMedica, Integra assets. Wondering benignant of pinch nan caller operators successful spot location for immoderate of them, if you could benignant of remark connected nan rent coverage, I'm not judge if it was successful nan supplemental. I cognize there's immoderate changes location successful position of nan reporting structure. So I'd emotion to conscionable perceive astir nan rent coverage. I deliberation it would beryllium adjuvant for investors benignant of fixed nan benignant of nan anterior history there.

John Burkart

Look, I deliberation pinch nan caller operators, we've transitioned to astatine slightest 16 operators truthful far. And by nan clip nan particulate settles, it will beryllium northbound of 20 operators. But each these transitions person happened complete nan past month, 1.5-month. So, it's excessively soon to person numbers and capacity conversations astir their performance, but wide transitions person been smooth. And successful nan upcoming months, we'll person amended information to stock connected capacity trends. But for now, nan attraction has been connected getting nan buildings successful nan correct hands. And arsenic you'll see, pinch 16 to 20 operators that nan attraction has been very heavy and very sharpshooter-esque wherever you want to find for each azygous asset, nan correct operator. So, that's been nan apical privilege truthful far.

Operator

We'll spell adjacent to Steve Sakwa pinch Evercore ISI.

Steve Sakwa

Shankh, I was conscionable wondering if you could talk a small spot much astir nan finance opportunities that you're benignant of seeing retired there? And benignant of nan distress successful nan system, you guys were evidently very progressive past year. I'm conscionable funny what it takes to benignant of shingle nan character and really nan returns mightiness person changed benignant of looking guardant connected nan caller deals?

Shankh Mitra

Steve, I don't deliberation I person overmuch to add. Maybe Nikhil has thing to adhd aft I'm done. I would conscionable show you that this is benignant of nan only clip I've seen wherever there's opportunity successful each 3 merchandise types crossed each 3 countries, right? You usually don't spot that. And that's driven by -- past mates of years person been chiefly indebtedness driven, right? So, we person seen a batch of opportunities successful nan IRR. So, we person done elder lodging 9%, telephone it circa, 9%, immoderate higher, immoderate lower, but telephone it astir 9%. Historically, I've said aesculapian agency is an absorbing business to bargain aliases absorbing abstraction to put around, telephone it, 7-plus unlevered IRR. Finally, we're seeing opportunities successful 8-plus level. And connected nan wellness side, wherever nan headdress rates person been very, very tight, IRRs person been successful nan 6s, we're yet seeing they're successful nan high-7s, right? So, that's benignant of, I would say, wherever nan different finance scenery wherever we're seeing opportunities, but depends connected -- immoderate are evidently higher. We're still seeing immoderate double-digit opportunities.

But I will show you nan different point is because it's not conscionable indebtedness driven but besides equity driven, astir of nan worldly that we person bought successful past mates of years, we're fundamentally focused connected correct location, correct product, correct basis. And we person bought tons of assets pinch nary rate flow, antagonistic rate flow. And finally, we're seeing because group person to transact, right, what's happening, we are seeing opportunities that pinch very bully bases, pinch very bully locations, assets are besides starting to travel pinch rate flow. That's benignant of, I will say, nan flimsy alteration successful nuance of nan finance landscape. But I don't know, Nikhil you want to adhd anything?

John Burkart

And I deliberation nan different point I'll adhd is we conscionable spell done a batch of symptom and effort to effort and beryllium nan highest value counterparty for personification to woody with. Whether it is nan velocity of execution, whether it is crossed nan clip framework of a transaction sticking pinch what we started disconnected saying initially, nan woody was, and successful times for illustration these, it conscionable makes america nan preferred counterparty. And so, there's a batch of nickname for that crossed nan Street. And it's times for illustration these that we really are capable to shine. So, very excited astir our pipeline for nan year.

Operator

We'll return our adjacent mobility from Rich Anderson astatine SMBC.

Rich Anderson

If I could conscionable -- connected nan PLR, very, very absorbing so -- conscionable immoderate thoughts astir it. Does this mean that we should spot benignant of a gait of finance from you guys to bring managers in-house for what you person currently? And really overmuch of nan IL portfolio that you person coming didn't qualify? Will location beryllium trim changes location to person them walk nan trial truthful that they besides tin suffice for nan PLR ruling? Thanks.

Shankh Mitra

Yes. So I'll return nan 2nd part. Think astir we person independent surviving astatine a standalone, for example, Holiday Atria portfolio arsenic good arsenic our Canada portfolio. That's roughly, I would say, 2/3 to 3/4 of nan independent surviving that we ain that evidently qualifies. How this relates to, erstwhile independent surviving is simply a portion of nan continuum, we will fig that out. Most importantly, I want to attraction connected what I said earlier that you will spot pinch our guardant reasoning prime operators who person density, you will spot that we will -- building retired nan platform, right? John has mentioned very intelligibly that he is building retired nan level pinch our champion operators, right? This is not a mobility of what portion will do in-house versus successful what portion we'll do pinch operator. We person besides different 15,000, 20,000 units successful nan wellness lodging assemblage there, which evidently we ever could person done in-house, right? So, this is uncovering nan correct equilibrium of unit density pinch each nan products that are retired location region, and bringing in-house wherever we person nan density versus -- aliases keeping it extracurricular erstwhile our partners person density.

So, nan crippled is not to who does what. This is not a conflict of conscionable because we do something, we'll do it better. The main extremity is pinch our operating partners build this operating level to nan highest value exertion and systems and processes and information to present nan champion result for our residents arsenic good arsenic frankly, worker experience. John, do you want to adhd thing to that?

John Burkart

Yes. I mean, that's said perfectly. And I would conscionable adhd successful a consciousness of nan speed, you tin only ideate we're moving and we person been moving highly accelerated to reside nan opportunities that we see. We'll decidedly build connected success. It's not precisely -- what Shankh's saying, it's not astir going retired and trying to power everything, it’s astir creating occurrence that drives worth to each nan various stakeholders. So, that's wherever our heads are at. And successful nan end, there'll beryllium a small spot of nan lag successful nan consciousness of wherever we walk money connected G&A versus wherever we commencement to offset that because of reduced fees because we're conscionable moving it for illustration nan multifamily, moving nan spot guidance services connected to nan book. So, a small spot of a lag there, but ultimately, it will offset and nan betterment will beryllium successful margins.

Operator

We'll spell adjacent to Juan Sanabria astatine BMO.

Juan Sanabria

Just wanted to deed connected nan SHO -- same-store NOI maturation guidance Shankh, I deliberation you mentioned successful your opening remarks astir nan exit tally complaint and focusing connected that. So possibly hoping you tin supply a small colour there? And should we presume that there's immoderate incremental transitions successful '23? You mentioned RUI having increasing -- going guardant done transitions arsenic well. So conscionable funny if you could possibly conscionable remark connected those 2 moving pieces.

Shankh Mitra

Yes. Thanks, Juan. So nan modulation piece, we'll commencement pinch that. There is not a contemplation of further transitions successful our guidance. So, our first 4th has astir 85% of our unfastened and operating buildings arsenic of 12/31. Our first 4th has 85% of that same-store and that grows to mid-90s. So connected average, benignant of 90% of nan unfastened and operating assets successful that pool. What was nan first question?

Juan Sanabria

The cadence of nan exit tally rate.

Shankh Mitra

Yes. So, if you deliberation astir it, we're building occupancy, right? You cognize that Q1 is benignant of nan weaker constituent successful nan occupancy spectrum, and you build occupancy -- occupancy maturation happens done outpouring and summer. So your occupancy build connected an mean basis, you get person to benignant of that Q3, Q4 level wherever you get a amended revenue, if you will, right, benignant of successful that yearly journey.

Now, deliberation astir expenses, which are besides coming down, right? So you person -- you astir apt person a amended -- importantly amended exit tally complaint successful Q4 than Q1, right? So pursuing some gross arsenic good arsenic expenses. Think astir really different business that I've described before, I deliberation nan past call, possibly nan 1 before, is really REVPOR builds, right? You move your rents connected a bunch of group astatine nan opening of nan twelvemonth and arsenic good arsenic our -- for our portfolio, conscionable telephone it, half and half. We besides person a very ample usability who moved successful Q4, but conscionable deliberation done really that plays out. And past you pursuit that in-place rent done your marketplace rent, which is besides going up for nan year. So, if you deliberation astir from an occupancy, from rates, from disbursal improvements, which is we're gladsome that agency costs is down from, telephone it, 7 to sub 4. We were very unhappy. It's still sub 4. It should beryllium importantly little than that. So if you deliberation done each of nan main drivers, you're going to get a overmuch higher exit tally complaint successful Q4 than Q1.

Operator

We'll move adjacent to John Pawlowski astatine Green Street.

John Pawlowski

John Burkart, could you conscionable springiness maine a consciousness for really overmuch much pushback your operators are seeing connected rent increases coming than successful caller quarters, truthful they've had nary rumor pushing rents? And if there's immoderate segments of nan portfolio that are starting to deed a wall conscionable successful position of absolute rents? Any colour location would beryllium appreciated.

John Burkart

Yes. No, gladsome to. I'm not alert of immoderate pushback. It's not to say, of course, erstwhile a rent summation goes out, there's not a discussion. But successful nan consciousness of defining pushback arsenic a marketplace consequence to that, no, I'm not alert of that. I think, nan -- our partners person done a phenomenal occupation of communicating nan increases and nan reasons down those increases. And I deliberation our residents understand that they don't want to spot important services and attraction cut. They want to person what they paid for, nan champion of that, and we're conscionable not alert of immoderate issues there.

Shankh Mitra

John, arsenic I mentioned, I expect REVPOR summation to beryllium amended successful '23 than '22. So, that benignant of gives you -- we'll spot what nan marketplace gives us. But arsenic we beryllium present today, we deliberation nan pricing situation is getting better.

Operator

We'll move adjacent to Vikram Malhotra pinch Mizuho.

Vikram Malhotra

Just possibly building upon nan pricing power, possibly Shankh aliases John, if you tin conscionable elaborate. You talked astir nan exit tally rate, net tally complaint benignant of arsenic a guideline to nan net power. Can you talk astir some connected pricing and say, CapEx, arsenic you spot ostentation travel in, your costs travel in, your possibly expertise to push higher rates. You said adjacent word is not hampered. But arsenic you spot ostentation travel in, but occupancy is still low, tin you conscionable springiness america immoderate discourse connected really you spot pricing powerfulness evolving until occupancy recovers? And then, similarly, CapEx-wise, aft 2, 3 years of COVID, what do you request to put from a tally complaint standpoint, possibly percent of NOI? Is location an uptick needed complete nan adjacent fewer years connected CapEx? Thanks.

Shankh Mitra

Let maine effort that. So first connected CapEx I do not believe, different than inflationary changes, thing alteration from a CapEx standpoint, right? So conscionable understand that we bought predominantly successful nan past two, 3 years, caller assets. We bought 1 aliases 2 portfolio arsenic nan value-add portfolio. And erstwhile we bought it, for example, nan Holiday Atria portfolio, we told you precisely what we underwrote to walk connected CapEx, right? We bought successful an highly inexpensive basis. And we told you precisely what that CapEx needs are and really we scheme to invest.

So from that perspective, arsenic you deliberation astir going forward, I do not judge -- extracurricular those mates of value-add investments that we person done, and we told you otherwise, erstwhile we person done it, we do not judge nan business’s CapEx needs extracurricular nan benignant of inflationary increases that are happening thing has changed.

Now, I deliberation John has a very ample plan, a very large scheme to reamenitize nan portfolio and benignant of fundamentally changing what nan worth proposition mightiness look like. Obviously, we'll do that if deliberation that we're getting awesome return connected that incremental investment. But from a regular CapEx perspective, I don't deliberation thing has changed.

From a pricing powerfulness standpoint, I don't deliberation -- what other I tin adhd different than to what I said to John's mobility and nan earlier question, which is we are emotion very bully astir nan pricing powerfulness crossed each our countries and crossed each our merchandise types. As you cognize that Canada has been a laggard, feels for illustration Canada is starting to drawback up. UK and U.S. has been beardown and proceed to beryllium strong. So, we're emotion beautiful good.

John, do you want to adhd thing to that?

John Burkart

Yes. I mean, again, I would conscionable say, connected nan value-add side, this is purely opportunistic. I mean, I conscionable look astatine nan world and spot our portfolio is positioned truthful good to travel pinch different furniture of value-add opportunities because of nan property of nan portfolio, which are really nan highest returns because nan infrastructure is each successful awesome shape. And so, you're talking astir what immoderate group would telephone fluff and buff, but reamenitize, enhancing nan units a small spot really improving that worth proposition and getting paid very good for it, very overmuch akin to what galore of nan multi person done, so. But that's each enhanced nan returns.

Shankh Mitra

Vikram, I missed 1 portion of your question. I'll conscionable show you that from a pricing powerfulness standpoint, this is thing I mentioned successful nan past telephone that we are -- contempt our mean occupancy of nan portfolio, telephone it, circa 80%, there's a important portion of nan portfolio, telephone it, springiness aliases take, half of nan portfolio, 45% of nan portfolio is successful that high-80s, mid- to high-80% occupancy. There, nan pricing powerfulness changes to raising value because person nary rooms to sell, right? So location is simply a move that's going connected and progressively we'll get to nan constituent arsenic we move mean occupancy for nan portfolio, much and much properties wrong nan bucket that you will get to that pricing powerfulness because, frankly, you person nary room to sell. So that modulation is happening and will proceed to hap successful '23.

Operator

We'll return a follow-up from Michael Griffin astatine Citi.

Michael Griffin

I conscionable wanted a clarifying question. I don't callback if I heard this earlier, but connected nan assets that proceed to beryllium operated by ProMedica, nan assisted surviving and representation care. What is nan sum connected those? Do you hap to person that handy?

Tim McHugh

Yes. Those are covered one-times connected EBITDA basis.

Operator

And we'll spell adjacent to Derek Johnston astatine Deutsche Bank.

Derek Johnston

…won't make nan wont of it. But connected staffing levels, astatine 80% occupancy successful elder housing, I judge that's adjacent afloat staffed, and please correct maine if I'm wrong. But nan mobility is, what are you modeling aliases including successful guidance for '23 comparative to agency labour arsenic a percent of labour expenses? And do you position this arsenic imaginable low-hanging consequence to get backmost to pre-pandemic levels of agency particularly arsenic John and nan squad summation spot level accountability.

Shankh Mitra

Let maine effort to return portion of that and Tim will return portion of that question. So, we do not position this arsenic a low-hanging fruit, but we do position this arsenic a consequence that tin beryllium plucked, right? So there's a batch of effort that's going on. Tim will show you what's modeled. Frankly, I don't know. But I will show you that this is -- agency labour is simply a usability of, frankly, anemic management. That's conscionable what it is, anemic leadership. And we're moving pinch our best-in-class operators to get nan correct group successful nan correct spot truthful that we should, complete a play of time, spot that improvement. As I've said, coming beneath 4% is an accomplishment erstwhile you commencement from 9%, but by nary means, I want you to deliberation that I'm really happy pinch that number. That number needs to beryllium substantially lower. And we request to really get full-time labor successful nan communities. This is not conscionable a mobility of cost, but also, arsenic John alluded to, it's besides a mobility of civilization and nan customer experience.

Tim McHugh

From a modeling perspective, we're fundamentally successful nan high-3s arsenic a percent of compensation. So beautiful level from wherever we came retired of 2022.

Operator

We'll move adjacent to John Pawlowski astatine Green Street.

John Pawlowski

Thanks. I conscionable had 1 follow-up connected nan Private Letter Ruling. I conjecture what other needs to hap internally successful position of people, systems, exertion earlier you're really capable to aforesaid run a important magnitude of IL units? I'm conscionable funny really quickly we could really spot Welltower run these assets.

John Burkart

Yes. So, I'll remark connected what would request to happen, but not needfully nan velocity astatine which. But if you look astatine it, I mean, 1 measurement to look astatine it is really conscionable to simplify nan world a batch and to opportunity what would hap erstwhile a institution -- from my past experience, erstwhile nan 2 companies merge, you look and say, okay, if I measurement into their systems and commencement to alert nan level pinch what they have, that could hap beautiful fast, right? That's not that complex. And so, nan timing of it could beryllium -- tin beryllium faster if we wanted it to beryllium faster by stepping successful that way. Obviously, what -- going backmost to what we're building, arsenic I've mentioned previously, we're utilizing mostly existing modules. There's immoderate imaginative worldly going connected correct now pinch nan team. But generally, it's existing modules that are retired there. And so, that doesn't return that agelong either. So, nan velocity tin spell reasonably fast. The bigger rumor is we're focused connected success, and we're focused connected moving pinch group to present nan success. It's not astir america needfully doing it. It's astir america delivering occurrence for each nan stakeholders. So, that's wherever my mind is at. But nan velocity could spell beautiful fast.

Shankh Mitra

It will not astonishment maine to spot that we commencement to aforesaid negociate immoderate assets -- immoderate IL assets successful almanac twelvemonth 2023.

Operator

And that does reason today's question-and-answer session. I'll move nan convention backmost complete to guidance for immoderate closing remarks.

And that does reason today's convention call. You whitethorn now disconnect.