KeyBank Launches $750M Health Care Real Estate Fund with Welltower

KeyBank Real Estate Capital has established a $750 million unitranche loan program in partnership with Welltower Inc. (NYSE: WELL).

The health care real estate fund will provide first mortgage financing on skilled nursing and seniors housing projects, according to a press release announcing the program.

A unitranche loan blends senior and junior debt pricing and terms into a single first lien debt facility rather than having two classes of debt and working with multiple lenders.

Jim McLaughlin, co-head of the Institutional Capital Group at Key Bank, described the product as a “seamless, streamline execution” for clients.

“We are thrilled about this program with Welltower that adds this healthcare real estate-focused unitranche loan program to our platform,” McLaughlin said in a statement.

Nikhil Chaudhri, co-head of US Investments at Welltower, said the real estate investment trust is excited to work with KeyBank through this initiative.

“Welltower’s ability to use its unparalleled data analytics platform, combined with its deep knowledge and 50 years of exclusive healthcare experience, will provide an exceptional relationship network with the top owner/operators in the health care real estate industry to identify attractive financing opportunities,” Chaudhri said in the press release.

Ahead of its third quarter earnings call on Friday, Welltower announced that it got rid of 21 properties previously leased to Genesis Healthcare, 13 properties previously leased to ProMedica, as well as one long-term/post-acute property and two medical office buildings for proceeds of $488 million.

During a panel at the National Investment Center for Seniors Housing & Care (NIC) conference this week, Chaudhri said the real estate investment trust looks for alignment between employees, partners and investors when making deals.

“In the last 18 months we’ve deployed roughly $6 billion of capital predominantly in senior living and when we think about how we’re deploying capital, we’re not thinking about year one, we’re not thinking about year two, we’re not thinking about cap rates,” he said during the panel. “We’re focused on total return.”