Welltower has officially announced a slew of acquisitions for a collective sum worth $14 billion, which will go towards strengthening focus on rental housing for the rapidly expanding senior population.
Geared towards unlocking high-quality seniors housing communities in the US and UK, these acquisitions will be fully funded through proceeds received from $9 billion of asset sales and loan repayments, as well as cash on hand.
More on that would reveal how this this comes as a part of Welltower’s larger $23 billion transactions, planned to scale up the company’s percentage of in-place net operating income (NOI)to the mid-80%-range. Here, the company will look to drive operational and technological transformation across its seniors housing portfolio, all for improving the experience of residents and their families, along wit that of site-level employees.
“Today’s announcements mark a watershed moment in Welltower’s history as we continue to evolve: intensifying the Company’s focus on seniors housing and accelerating the operational and technological modernization of the business through the Welltower Business System,” said Shankh Mitra, Welltower’s CEO. “All capital allocation decisions made at Welltower are viewed through an opportunity cost prism: evaluating the value forgone by pursuing a specific course of action while also forcing us to consider all implications of those decisions, well into the future. We believe that re-doubling our efforts in the seniors housing business represents the surest and fastest path to achieving our mission.”
Under the given development, Welltower has also confirmed an exclusive long-term partnership with Barchester, a company best-known for managing more than a staggering 111 communities, each one taken care of using an aligned RIDEA contract. Beyond that, Barchester also has in the bag well over 152 triple-net leased communities, and 21 ongoing developments that will also be again handled in a RIDEA structure.
“Through our strategic partnership with Welltower and their significant and ongoing investment into their operating platform, we expect to continue to meaningfully enhance the lives of thousands of older adults by delivering not only exceptional care but also fostering environments rich in social and cognitive engagement. By prioritizing safety, connection, and activity, we’re supporting better long-term health outcomes and consistently high resident satisfaction – hallmarks of a superior living experience,” said Dr. Pete Calveley, Barchester’s CEO. “This partnership underscores our unwavering commitment to elevating the quality of care for aging seniors.”
Moving on, Welltower even purchased 100% of the HC-One-operated portfolio for £1.2 billion.
The stated development markedly develivers a rather interesting follow up to Welltower recently acquring $4 billion of seniors housing acquisitions through nearly 40 transactions across over 150 communities and over 12,000 units. This covers senior housing communities along the East Coast, including those within Boston and Westchester County, NY.
Among other things, it ought to be acknowledged how the company is also set to divest an 18 million square foot outpatient medical (OM) portfolio in a transaction valued at approximately $7.2 billion. Not just that, Welltower will also exit the OM property management business through a significant transition of operational responsibilities to Remedy Medical Properties.
“Through our amplified focus on seniors housing, and an ever-expanding and deepening of our moat, the Welltower Business System, we believe we have successfully laid the foundation for substantial shareholder value creation and long-term compounding of per-share earnings and cash flow growth for our existing owners, our North Star,” said Mr. Mitra.
