Welltower Strikes $1B Senior Housing Deal
Welltower is buying 25 senior housing communities concentrated in the Pacific Northwest, bringing its total portfolio to 25,000 units.
The healthcare and senior housing REIT acquired around 3,900 units from Affinity Living Communities for $969M, Welltower announced in its end-of-year earnings release Tuesday. The transaction is expected to close over the next several months.
The acquisition will allow Welltower to “strategically scale the geographic reach of its Wellness Housing portfolio,” an accompanying release said, allowing it to grow in markets that are expected to have higher growth in the 55-plus age range than the national average.
“Our Wellness Housing portfolio helps address the significant and growing unmet demand for wellness focused rental housing for seniors,” Welltower CEO Shankh Mitra said in the release. “These communities provide thoughtful amenities and targeted social programming for empty nesters and active adults at moderate price points.”
Affinity will continue to manage the properties in eight states: Washington, Colorado, Idaho, Minnesota, Montana, New Mexico, Oregon and Texas.
"The Welltower partnership will enable us to enhance and extend our ability to execute our mission of creating thriving communities in which our engaged residents live full and happy lives,” Affinity President Darin Davidson said.
The deal was a privately negotiated, off-market transaction, per Welltower, which said the acquisition pencils out to $249K per unit, a “significant discount in replacement cost.” Affinity’s units average $2,100 per month.
The transaction is the latest in a string of senior housing acquisitions by Welltower. During the last quarter, the REIT acquired 10 senior living properties from Kayne Anderson Real Estate for $469M, seven from Quality Senior Living in the mid-Atlantic and Southeast for $195M and twelve in Quebec from Cogir for $885M CAD, according to the release.
For the Affinity acquisition, Welltower said it is taking on $523M in below-market-rate debt for the transaction, averaging a 3.8% interest rate with a nine-year weighted average maturity, and will pay the rest with cash on hand.
Toledo, Ohio-based Welltower said in its Q4 report it posted 23.7% year-over-year net operating income growth in its senior housing portfolio.
