Healthcare REITs: BofA proprietary SHOP margin analysis take 2: unlocking record margins in SH

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Healthcare REITs: BofA proprietary SHOP margin analysis take 2: unlocking record margins in SH

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Healthcare REITs

BofA proprietary SHOP margin analysis

take 2: unlocking record margins in SH

Industry Overview

SHOP margins are surpassing previous highs of 30% 08 June 2026

In our inaugural proprietary margin analysis, we highlighted meaningful upside across Equity

SHOP portfolio margins, with a path toward ~40% by 2030. Since our 3Q25 report, United States

performance has continued to exceed expectations, with WELL, VTR, and SBRA now REITs

surpassing prior ~30% margin peaks. Supported by favorable senior housing supply and Farrell Granath

demand dynamics, we expect all SHOP portfolios in our coverage universe to exceed Research Analyst

30% margins by 2030 and ultimately reach 33% to 41% at stabilized occupancy near BofAS+1 646 855 1351

96%. See Exhibit 2. We maintain Buy ratings on WELL, AHR, VTR, SBRA, NHI, and JAN. farrell.granath@bofa.com

Jeffrey Spector

Research AnalystStreet estimates for margins have revised upward 160bps BofAS

Since 3Q25, Street estimates for 2028E SS SHOP margins have moved meaningfully +1 646 855 1363

higher by +160bps. While the gap between our estimates and consensus has narrowed, jeff.spector@bofa.com

the absolute level of expected margin expansion has continued to increase. In our original JulietaResearchMichelinAnalyst

3Q25 report, our 2028 SS SHOP margin estimates were, on average, +300bps above the BofAS

+1 646 855 1898

Street. As of 1Q26, our 2028 estimates stand only +81bps ahead of consensus at 33.4%, julieta.michelin@bofa.com

but the gap widens further to +190bps in 2030 to 36.8%. We view the upward revisions REITs Team

as a reflection of accelerating senior housing fundamentals & improving execution across BofAS