Welltower (NYSE: WELL) plans to expand its strategic partnership with StoryPoint Senior Living with a $548 million acquisition of 33 communities. And, the Toledo, Ohio-based real estate investment trust (REIT) has closed on a strategic partnership with Related Cos. and Atria Senior Living to develop two high-end projects, to be located in Silicon Valley.
Welltower on Sunday announced it had agreed to purchase three senior living portfolios totaling 33 communities in Michigan, Ohio, and Tennessee for $548 million, representing about $197,000 per unit. Approximately three-fourths of the communities’ units are assisted living and memory care.
The communities carry an average age of about six years and 63% current average occupancy.
The transaction expands the REIT’s relationship with Brighton, Michigan-based StoryPoint, which is slated as the communities’ operating partner under a RIDEA 3.0 contract.
Welltower expects to fund the acquisition through the issuance of operating partnership units, debt and cash.
The transactions represent an evolution of Welltower’s relationship with StoryPoint, according to Welltower CEO and Chief Investment Officer Shankh Mitra.
“Since our highly accretive portfolio sale in 2019, we have regrown our StoryPoint relationship from two operating communities to 74 following the consummation of the announced transactions,” Mitra said in a press release. “We are extremely proud that the transactions are allowing us to further serve these markets with one of our best operating partners.”
Occupancy for Welltower’s senior housing operating (SHO) was relatively flat between the beginning of the quarter through March 4, with an increase of 30 basis points over the past two weeks.
Welltower has invested about $6.8 billion since October, 2020, with $1.2 billion occurring since the beginning of the first quarter of 2022.
New projects announced
Welltower also noted that a joint venture between Related Companies and Atria Senior Living has signed a strategic partnership to develop two new communities in Santa Clara and Cupertino, California. The deal occurred as part of a larger strategic partnership among the three companies.
The 191-unit community in Santa Clara is planned next to a larger, 9.2 million square foot urban development from Related that is set to include office and medical office buildings, hotels, multifamily housing and retail. Related started entitlement and pre-development work on the plan in 2015.
The 158-unit community in Cupertino is planned next to a senior center, park, college and a forthcoming outdoor community park. Pre-development of the community started in 2019.
The project partners expect to break ground on both developments this year, with projected completion dates in 2024.
Welltower was also a partner on two Coterie projects with Atria and Related: Coterie Cathedral Hill in San Francisco, which is officially open now; and Coterie Hudson Yards in New York City, which is set to open later in 2022.