While Welltower Inc. (NYSE:WELL) was primarily focused on non-skilled nursing assets in the third quarter, it nevertheless completed some large SNF acquisitions worth over $400 million during the quarter.
The Ohio-based REIT acquired 24 long-term post-acute care properties in Q3, totaling 2,897 beds at $140,000 per bed.
“Next, same-store NOI and our long-term post-acute [ph] portfolio grew 5.3% year-over-year, and trailing 12-month EBITDA coverage was 1.44x,” Welltower CFO Tim McHugh said during the earnings call, adding that net operating income (NOI) growth was 4% to 5% for long-term post-acute care. Welltower did not say who would operate those facilities.
Overall, Welltower is minimizing its skilled nursing portfolio relative to other properties, but likely took advantage of attractive market conditions for buying skilled nursing facilities.
Overall, Welltower completed $1.63 billion in investments in the third quarter, including $1.4 billion of acquisitions and loans at 6.9%. The REIT made $405 million in SNF investment “likely taking advantage of market dislocation,” analysts at BMO Capital Markets noted. Of this, $325 million of dispositions and loans at 0.4% were completed in the latest quarter. Meanwhile, for the fourth quarter Welltower closed or is under contract on $922 million on investments and loans.
In November of last year, Welltower announced its plans to sell and transition 147 skilled nursing facilities currently managed by ProMedica into a newly established joint venture with Integra Health.
As part of the arrangement, ProMedica agreed to relinquish its 15% stake in the skilled nursing facility assets associated with their existing 85/15 joint venture with the real estate investment trust (REIT) and offer substantial working capital support to ensure a seamless transition in patient care and operational aspects.Skilled Nursing news reported that in the third quarter of 2023, there was a notable decrease in the amount of money spent on acquiring senior housing and care properties, marking the lowest quarterly expenditure in the past ten years, according to data released by LevinPro LTC, which revealed a total of 115 deals for the quarter. Among these, 41% of the transactions were related to skilled nursing facilities, while 49% were associated with assisted living properties.
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