Shankh Mitra
Chief Executive Officer at Welltower
Thank you, Matt, and good morning, everyone. I'll review our third-quarter results and capital allocation activities. John will provide an update on performance of our Senior Housing Operating and Outpatient Medical Portfolios, and Tim will walk you through our triple-net businesses, balance sheet highlights and revised guidance. Nikhil will also participate in the Q&A section of the call.
Against a backdrop of increasingly uncertain macroeconomic outlook, I'm pleased to report another strong operating results with -- which continue to exceed our expectations. Our Senior Housing portfolio posted another quarter of exceptional revenue growth which continues to approximate out double-digit levels, driven by both strong pricing power and occupancy build. We're delighted to report that occupancy growth not only accelerated through Q3 but also that September occupancy gains marked the highest level we have seen over the last two years.
From a pricing standpoint, we continue to achieve outsized rate increases as reflected by nearly 7% growth in RevPOR or unit revenue. As you may recall, we previously mentioned that last year, one of our largest operator pulled forward its typical January increase to September 2022. This year, the same operator elected to maintain its historical cadence of rate increases and will therefore wait until January of 2024 to push through rate increases. As a result, reported pricing of Q3 this year may appear lower than what we're experiencing in the business, and it bears repeating that our operator's pricing power remains strong.
The story on the expense side is similar to that of our topline and result continues to outperform our elevated expectations. We reported 2.4% expense per occupied room growth or unit expense growth, the lowest reported ExpPOR growth in the company's recorded history. This is largely driven by a 2.7% increase in compensation per occupied room, which represents a substantial step-down in recent quarters.
This combination of strong revenue and controlled expense growth has generated 333 basis points of same-store margin expansion, yet another record for the company, as it marks the highest level of quarterly margin improvement in our recorded history. And our SHOP NOI margin of 25.6% is the highest level of profitability we achieved since pre-COVID.
NOI growth for the quarter came in 26.1%, our fourth quarter -- fourth consecutive quarter of 20%-plus NOI growth and the second highest level of growth in the company's recorded history. While we are pleased that margins are moving in the right direction, we're also mindful that our profitability remained significantly below pre-COVID levels and below where we believe the industry can attract external capital investment on a long-term basis.
Our managers strive to deliver superior product, experience and provide valuable choices for our retired seniors. Our product remains highly affordable at the high end while we operate in the U.S. and U.K., and they should continue to focus on highly differentiated services even if that means rate increases need to remain at the elevated levels. As I've said many times, cutting corners is not in our DNA. We recommend that our operating partners serve fewer residents well than serve more of -- more of them poorly.
As a result, one of our key items to focus is to work with the right operator to improve the customer and the employee experience. We believe that doing so will improve the experience of all [Technical Issue] -- of all of our stakeholders. Conversely, we'll be very disappointed if our operators take the path of lease resistance, which ultimately will impact resident and employee satisfaction. We continue to focus on the delta of RevPOR minus ExpPOR as the single most important operating metric to optimize. While it is too early to comment on anything specific related to 2024, as I sit here today, I can believe -- I believe that the delta of RevPOR minus ExpPOR can expand which we need to get to a sustainable level of margin.
From a product standpoint, AL continues to outperform IL, and from a geographic standpoint, Canada finally caught up to the level of growth that U.S. and U.K. were experiencing. We have further retailin to do in our Canadian business with our new operating platform being launched in next few weeks. And going forward, we believe both of our international businesses will have -- be significant contributors to our earnings growth in '24 and '25.
From a capital allocation standpoint, we have never been busier. Last quarter, we spoke about a pipeline of $2.3 billion. We closed $1.4 billion in Q3, and roughly another $900 million in October. Additionally, we have another $1 billion of deals just about to cross the finish line. Beyond these $1 billion of investments under contract, our pipeline remains large and near-term actionable but the execution of these deals will depend on our access to capital. The extremely challenged debt and equity markets in this higher-for-longer rate environment suggests that this trend will continue, and perhaps, will get better in '24. We'll continue to see credit evaporate from the -- our investment universe and are selectively pursuing great opportunities in both whole stack and med stack levels with highly favorable last dollar exposure. These opportunities have potential to achieve equity returns with basis and credit downside protection typically seen in low-leverage transactions.
We're seeing opportunities across product types and geographies with equity investments in U.S. Senior Housing and credit investment on the SNF side, making up the large swath of opportunities that were constantly being pinged on. I want to remind you that we have a three-dimensional lens through which we measure investment opportunities, risk, reward and duration. Given the substantial rise of real rates over last 90 days, we have recalibrated the thresholds of these three thresholds higher. In other words, for the same risk we need higher returns today than we did 90 days ago or we can do deals with a similar return profile, but with a much lower risk and so forth.
We're student of history and markets and cannot find many times when a lot of good has come out of a period of highly -- sharply higher real rates. If real rates continue to grind higher, we'll continue to calibrate our three guideposts higher. So far, we have no problem achieving these re-calibrations as sellers understand three markets have changed, and we remain the best at many times the only hope for liquidity.
From a balance sheet perspective amidst a growing macroeconomic fiscal and geopolitical uncertainty, we're pleased to have reduced our net debt to adjusted EBITDA to one of the lowest levels in our recorded history, which also represents nearly a 2-time decline from just 12 months ago. Our balance sheet strength and flexibility gives us opportunity to remain on offense or provide shelter if the economic environment meaningfully worsens next week. We don't have a clue which direction the wind will blow but I'm delighted that we don't need fair weather to meet our obligations or grow.
As you all know, a wall of debt maturity in commercial real-estate sector is coming exactly at a time when debt capital is evaporating from the market. We will not be surprised if significant dilutive capital is raised or otherwise a lot of keys will need to be returned to the lenders. I am certainly grateful to Tim and our best -- best-in-class capital markets team for keeping us ahead of the cadence that Nikhil and I can spend on as we look to capitalize on the best environment for investments that we have ever seen.
Year-end is shaping out to be extremely busy and Q1 also looks promising if we continue to have access to growth capital. At the risk of sounding like a broken record, I want to reiterate that we'll only grow externally if and only if we can grow value accretively on a per share basis for existing shareholders. I hope that you as our shareholders are as excited as I am about our operating results and capital allocation activities. But interestingly those are not the most exciting things -- exciting areas inside Welltower today. What truly galvanized is our -- are the exciting prospects of John's operating platform and especially the digital transformation of Senior Housing industry.
As we have discussed ad nauseam, we refuse to accept the lack of 21st-century business process and technology infrastructure of this primarily people-driven business where individual communities are on their own island. We have made tremendous strides in last 90 days on the technology backbone of what Welltower 3.0 may look like and how far we can raise the bar for resident and employee experience. Welltower's engine room is buzzing with pilots and scaling around traditional technology solutions like -- from ERP and CRM to advanced technology solutions around robotics and artificial intelligence.
Our goal is to elevate the community experience by delighting the customer and their families, and simplify and enhance the employee experience, all of which should lead to occupancy and NOI growth. Then and only then do we have perhaps a shot at earning a long-term sustainable return for our owners, which has been less than satisfactory over last decade.
My partners and I are truly inspired and are hopeful that we're turning the corner to achieve multiyear double-digit compounding growth rate. While supply and demand backdrop is squarely in our favor, we're far more focused on the value-add alpha from our platform, which you as our fellow owners have funded to build with our blood, sweat and tears.
And with that, I'll pass the call over to John.
