Shankh Mitra
Chief Executive Officer at Welltower
Thank you, Matt, and good morning, everyone. I'll review high-level business trends and describe our capital allocation priorities before handing the call over to John, who will detail the operational trends and provide more details on the operating platform that he is building. Our total revenue is up 29% year-over-year, driven by both organic revenue growth and contribution from significant capital deployment activity over the last 18 months.
On a same-store basis, our senior housing operating portfolio revenue is up 11.5% year-over-year, driven by a 5% occupancy growth and a 4.5% REVPOR growth. All this translated into a 15.4% same-store NOI growth in Q2. Our annual EBITDA is back above $2 billion. Annualized in-place SHOP NOI is at $895 million. Though shy of $923 million of pre-pandemic numbers, our revenue has surpassed pre-pandemic levels. However, I'm not happy with these results, which I would characterize mediocre at best. Why?
Because the size of our portfolio is much bigger today, given the significant amount of capital deployment over the last 18 months and yet our quarterly results are not reflecting the cash flow that this portfolio is capable of generating. I'll give you a few things to reflect on. First, we have about 120 senior living -- senior housing properties that are generating negative cash flow today. In other words, if we just shut down these buildings, our earnings would be significantly higher.
Clearly, we would not do such a thing as they were recently developed or going through a value and repositioning program. Hence, the timing mismatch. Second, while I don't like to fix it on short-term trends and instead focus on long-term prospects of the business, I'll offer a few observations on the second quarter. We started the quarter with results coming in better than expected, only to get hilt simultaneously by multiple challenges primarily related to another COVID spike during the last couple of weeks of June.
Only this time, we didn't see it coming as the testing requirements have been lowered in recent months, particularly for those residents who are not experiencing symptoms. In instances, while few residents or team members develop symptoms in an entire building, would be tested only to find out many asymptomatic residents and staff actually were COVID-positive.
This created some disruption to move-ins, but particularly impactful to the use of agency labor in June. Our operators are walking through as we speak and made very good progress in July. Let me dig into some recent trends even a bit more. From a demand standpoint, we always see first half of July as two last weeks, similar to the last weeks of December as families celebrate 4th of July weekend and don't usually move parents and grandparents in. This July, we lost an additional week.
And as a result, almost a whole month was shut from a move-in perspective before we gain significant traction later in the month with tour activities returning to the levels experienced in June. We and our operators have a few theories of why that might be the case. One, the hyper positivity rate of COVID over 20%. Despite people on a reporting to government, families know from home testing they're COVID positive and are delaying move-ins as they wait for this wave to subside.
And number two, travel. Summer travel has surged as families took advantage of looser COVID restrictions. Again, I would describe this as our conjecture because we don't know for sure. But we are clearly seeing broad-based demand recovery continues, particularly towards the second half of the month in terms of leads and tours, which led to a recent rebound in move-ins across the portfolio over the last couple of weeks. On the cost side, it is important that you understand the progress we made on the agency labor.
In the U.S., most of our operators are decreased from June to July, resulting largely from a favorable net hiring trends. The July books have not closed yet, we're expecting a decline in agency labor expense in high-single digit from month of June. In terms of net hiring, our operators have continued to make significant momentum with July increase alone in headcount nearly equal to the net hires of past six months of the year combined.
As a result, we're already starting to see benefit of this trend, which should reduce the dependence on agency labor in the second half of the year. The downside of high-frequency data is that you get a lot of noise. And I strongly believe that's what you're seeing in the numbers today, a lot of noise. I encourage my team and will encourage you not to confuse any short-term high-frequency noise whether good or bad as a signal and project that into the future prospect of the business.
For a few quarters, I've been talking about the run rate earnings or the true earnings part of this portfolio being significantly different from our current reported earnings. Clearly, some of the anticipated second half growth has slipped into the next year, but this should only be a timing mismatch. As we focus on '23 and '24, I continue to believe that this earnings part will shine through. Before I move on to the capital allocation priorities, let me make a comment on ProMedica.
When we bought HCR ManorCare portfolio out of bankruptcy, we did not outsource our underwriting to rating agencies. Clearly, there was no way for us to predict a global pandemic or a day when almost every hospital system in the country would lose money similar to what happened in Q1 of this year because of COVID. We got comfortable because our basis of $57,000 per skilled nursing bed, we saw very minimal risk of pharma and capital loss, which is at the core of how we think about risk.
Of all the structuring belts and whistles aside, which we're very proud of, we fundamentally believe investment basis not cash flow in a given building at a given point in time determines investment success. Having said that, the ProMedica team has been able to make reduced agency labor almost by half over the last four months and significantly narrowed their operating losses. We have below-market basis and thus, below market rent here.
I remain very comfortable with our rent and longer-term expected IRR from this investment that we discussed with you when we did this deal four years ago. Turning to the capital deployment. I cannot overstate how favorable of an environment we find ourselves in today. During the second quarter, our off-market, privately negotiated transaction machine kept humming, having deployed an additional $1.1 billion of capital.
Today, there is definite stress in the lending environment given the significant rate and credit volatility and increasing recession talk. Cap rates are going up across the board and most institutional capital is waiting to see where the chips fall. We're seeing many high-quality opportunities, and we think the environment will only get more favorable as Fed continues to raise rate at a rapid clip. Our pipeline remains robust, having replenished after all of our Q2 and Q3 closings.
Our fundamental investment thesis remains intact. One, we need to buy at a favorable basis relative to replacement cost; and two, we need to be able to add value through our platform. We're not spread-investing deal junkies and instead remains laser focused on total return or unlevered IRR. I continue to believe this year will be a record year for Welltower from a capital deployment standpoint.
Cost of capital has surged for everybody, including governments and access to capital remains very sparse for most people. In this environment, we remain in a very favorable capital position with $2-plus billion of equity capital that is raised but not settled and almost full availability of our $4 billion line. Sellers who did not like our price six months ago are realizing that glossy broker package and nonbinding LOI are not cash in a bank.
This environment reinforces the value of a counterparty like Welltower, which always acts on a very simple principle. We say what we do and we do what we say. And in that vein, as our long-term investors have come to expect from us, we exercise utmost discipline on every transaction we look at, large or small and will not chase any deal. As we have said in the recent past, price is the price, and we only act in a manner that creates long-term value for -- part share for our owners.
With respect to capital deployment over the last 18 months, some of you have asked me if I'm satisfied with the performance of these properties. In many cases -- in the case of many of these acquisitions, including some larger ones, the answer is no. The same-store challenge that I have described above are accentuated in many non-same-store properties, which are being repositioned through operator changes.
However, I do believe that we have turned the corner as we approach the completion of our operator transition and system integration for the COVID class of acquisitions. We should see significant progress from these properties as we enter next year. Please recall, we make investment decisions based on long-term IRR with an exit cap rate going up every single year from the duration of the ownership. And we feel strongly about achieving those return targets as we have discussed with you.
As frustrating as near-term challenges of operator transition might be for reported earnings and trust me, I share those frustrations with you, we have to do what's right for long-term interest of our owners. I will give you two examples. Vintage and Gracewell, two of the most ill-fated HCN acquisition from many months ago. Despite some of the most coveted locations and capex plans, these assets did not live up to our expectations.
We finally pulled the plug over last 12 months, frankly, because we're not permitted to do so earlier. Our Gracewell assets were transferred to Care UK and the Vintage assets were mostly transferred to Oakmont with one each to Kisco and Cogir. Oakmont has already made incredible progress with the first tranche of the asset they received last fall, with occupancy up 13%, and I believe you will see this repeated in the most recent tranche as well.
Care UK is having similar success with Gracewell assets taking occupancy above 80%. And I believe they will be stabilized or get close to it in 2023. We made similar decisions for our other properties, which come with some short-term gain. But as we 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 long term, practically speaking, we often encounter situations where those time horizons diverge. And it is critical for our investors to understand that at these crossroads, we'll always follow the path to long-term value creation at the expense of short-term gains. The good news is that all of these, as my partner, John Burkart, would say, is baked in the cake.
With that, I'll hand the call over to John, who will describe to you perhaps the most exciting set of initiatives that will transform the business as we know today and creates tremendous value for our residents, team members, operating partners and most importantly, our shareholders. John?
