Welltower (NYSE: WELL) has announced its intent to dissolve a joint-venture agreement with Revera and sell its 34% ownership stake in Sunrise Senior Living to the Mississauga, Ontario-based company, which is also the operator’s owner.
The Toledo, Ohio-based real estate investment trust (REIT) announced on Monday a series of transactions that included acquiring from Revera interest in 110 properties in the U.S., Canada and the United Kingdom while selling to the company interest in 31 properties.
Welltower is also launching a new senior housing operating platform with Cogir in Canada, representing the company’s first substantial move toward self-management following its favorable private letter ruling on self-management earlier this year.
In July, Welltower also bought the remaining interests in 10 properties that are under development or have been recently developed by Sunrise. Welltower also as part of the transaction sold its minority interests in 12 U.S. properties and one Canadian development project.
Oakmont Management Group is now managing operations for two recently developed communities in addition to 26 others, according to Welltower.
Welltower closed the U.K. portfolio portion of the transaction in the second quarter by acquiring the remaining ownership interest in 29 properties previously held in two separate joint-ventures. In exchange, Welltower sold to Revera its interests in four properties. Operator Avery is stepping in to manage the communities. Avery was acquired by Reuben Bros. with Welltower’s help last year.
Welltower management expects to close the rest of the transactions in its Canadian portfolio — consisting of 85 properties in a joint venture 75% owned by Welltower — before the end of 2023. As part of the transaction, Welltower plans to acquire Revera’s interest in 71 properties and sell its interests in the remaining 14 properties in the portfolio.
Cogir Management is taking management of properties in Quebec and Southeast Ontario, while Optima and Levante are set to take over communities in Alberta, British Columbia and Ontario.
Welltower is in partnership with Cogir launching a senior housing operating platform later this year in “English-speaking Canada.” According to its Monday business update, Welltower reported 74% occupancy across transitioning properties included in the Cogir partnership.
Welltower first linked up with Cogir in 2015. Since then, the company’s collaboration has extended to 95 communities through a combination of development, acquisitions and management transitions.
A representative for Welltower declined to elaborate on the announcement prior to Tuesday’s second quarter earnings call.
The dissolution of the joint venture with Revera “largely concludes Welltower’s seven-year contract modernization journey,” the company noted in its business update.
The joint venture between Welltower and Revera dates back to 2013, when the REIT acquired 47 communities from Revera. Over the years, the partnership has included substantial investment in the senior living sector on behalf of Welltower. The REIT previously owned a stake in Sunrise with Revera in a 34%-66% joint venture partnership.
Welltower reported year-over-year same store net operating income (SSNOI) growth of 12.7%, led by SSNOI growth in the company’s Senior Housing Operating (SHO) portfolio of 24.2%. Same-store revenue increased 9.9% in the second quarter compared to the same time last year, driven by occupancy growth and revenue per occupied room growth of 7.3% compared to the second quarter of last year.
Welltower’s stock came to rest at $82.15, up $1.04 (1.28%) from the start of trading on Monday. The company’s second quarter earnings call with analysts and investors is scheduled for tomorrow at 8 a.m. CST.
The post Welltower Sells Stake in Sunrise, Unwinds Revera JV in Preparation for Self-Managed Platform appeared first on Senior Housing News.
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