February 14, 2020, Ben Swett, SeniorCare Investor - The major M&A moves keep on coming from Welltower, as the REIT giant continues to reshuffle assets. And this is as good a time as any, since according to The Senior Care Acquisition Report (which will be published later this month), seniors housing values are currently at a record high, averaging $244,200 per unit sold in 2019. Cap rates are also near record lows, making for some very happy sellers.
Welltower announced that it was selling a “prominent Seniors Housing Operating portfolio in the western United States” for a gross sale price exceeding $740 million. The properties, which were assisted living, are located in California, Nevada and Washington, and were 97% occupied. They also achieved NOI of $36.7 million in 2019, putting the cap rate for the deal as low as 5%, depending on the final purchase price. The buyer was not disclosed.
In addition to a couple of outpatient medical property and medical office deals, Welltower also announced a definitive agreement to sell three skilled nursing facilities operated by HCR ManorCare. The REIT received an unsolicited offer for the portfolio, resulting in a gross sale price of $67 million, or about $156,000 per operational bed. The average age of the facilities is 49 years old, but age isn’t everything, and the facilities must be operating decently well. The deal should close in the first half of 2020.
Welltower will have plenty of proceeds from these two deals. We’re looking forward to seeing what the REIT does with it.