Welltower to Sell Three ManorCare Skilled Nursing Facilities for $67 Million

Welltower Inc. (NYSE: WELL) on Wednesday announced the pending sale of three skilled nursing facilities operated by HCR ManorCare and ProMedica for $67 million.

“The sale of these HCR ManorCare-operated facilities was initiated following an unsolicited offer and is anticipated to close in the first half of 2020,” the Toledo, Ohio-based real estate investment trust (REIT) noted in its fourth-quarter 2019 earnings release, issued late Wednesday.

The properties have an average physical plant age of 49 years, Welltower reported, and the tentative deal was struck sometime during the fourth quarter of the year.

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The deal works out to about $156,000 per operational bed, according to Welltower — a price tag that’s in line with the $150,000-per-bed offers executives said they’d been fielding for properties within its ProMedica/ManorCare portfolio, which the REIT purchased back in 2018 at a blended rate of $57,000 per bed.

“The sheer magnitude of this price increase hopefully gives you a sense of what we think the total return looks like today versus when we made that investment,” Welltower chief investment officer Shankh Mitra said during the company’s third-quarter 2019 earnings call back in October.

Though the REIT had previously insisted that it has no interest in selling off large chunks of its ManorCare portfolio, which it owns in a joint venture with the ProMedica health system, executives identified two separate unsolicited bids for some of the buildings last year.

Over the course of 2019, the company shed a total of 48 long-term and post-acute care facilities for $558 million, touting the reduction of exposure to the asset class in the Wednesday release.

Tenant Genesis HealthCare (NYSE: GEN) pulled off a pair of deals to buy back properties from Welltower in 2019, including a $204 million, 15-SNF transaction last February and an 18-building deal in October that also involved properties previously owned by Second Spring Investments.

Welltower will hold its fourth-quarter earnings call with analysts and investors early Thursday.

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