Welltower Inc (NYSE:HCN) has announced that it plans to acquire Sunrise’s healthcare communities portfolio as part of its plan to boost its own healthcare portfolio.
The company made the announcement in the first week of the month, revealing that it struck a definitive agreement to acquire the portfolio from Sunrise. The portfolio includes four rental continuing care retirement communities (CCRCs) that are located in the top markets of Charlottesville, Miami and Washington D.C., specifically the Metropolitan Statistical Areas (MSAs). Sunrise currently manages the communities through triple-net lease although Welltower will acquire landlord ownership interest for $368 million. It will also transform them into a RIDEA structure so that it can offer advanced care.
“We are pleased to announce the acquisition of this unique portfolio. Only Welltower, with our superior relationship investment model, is able to source, execute and unlock immediate value in off market investments such as this,” stated Welltower CEO, Tom DeRosa.
DeRosa also noted that the portfolio that his company will acquire is located in the top markets and that it will not only represent an enhancement of Welltower’s portfolio, it will also support above-market returns for the company’s shareholders.
Welltower has already finalized its acquisition of one of the communities and it plans to finalize the acquisition of the remaining three communities within the first quarter of this year. The company expects the portfolio to offer nominal cap rate of 7 percent within the first one year. The portfolio is also expected to provide significant additional revenue for the company on top of its already existing portfolio and is part of the company’s plan to expand its territory as part of improving its business and returns for investors.
The new deal acquisition is also not the first dealing between the two companies. Welltower has investments worth more than $6 billion together with Sunrise Senior Living. The latter has its operations in more than 300 countries communities in multiple countries including the United Kingdom, Canada, and the U.S.
Welltower stock closed its latest trading session on January 5th at $62.37 after closing the previous session at 62.76, thus losing by a few points.