Welltower (NYSE: WELL) leaders elaborated on the company’s major expansion in the U.K., following its acquisition of a Barchester Healthcare portfolio for approximately $6.92 billion, as well as gaining 100% equity ownership in HC-One for about $1.6 billion.

Welltower CEO Shankh Mitra said during the real estate investment trust’s (REIT) Q3 2025 earnings call that the Barchester deal was the result of nearly 6 years of conversations, negotiation and a near-miss in the midst of the pandemic with one of the largest U.K. providers of residential and nursing care. 

Analysts at BMO Capital Markets summed up the recent deals as “U.K. golden years” for the Toledo, Ohio-based REIT.

“Our years of conversation and close familiarity with the Barchester assets and management was certainly helpful … we’re proud to welcome Pete and the Barchester management team to the Welltower operating family,” said Mitra, referring to Barchester CEO Dr. Pete Calveley. “I’m delighted to inform you that this $7 billion negotiation was done during a single sitting, resulting in a firm handshake.”

Long talks and near misses

Successful talks were the result of patience, finesse and a commitment to excellence that Barchester’s legacy deserves, Mitra added. The REIT has been looking into investing in Barchester since the company put the portfolio on the market in July 2018 for £2.5 billion, but Welltower pulled out of a potential deal in the midst of the COVID-19 pandemic, The Times reported in 2020.

Ventas Inc. (NYSE: VTR), Australian investment bank Macquarie and property investment firm Columbia Pacific Advisors were also interested in the portfolio at the time, according to the Times.

The portfolio that Welltower now has invested in comprises 111 communities managed by Barchester in a RIDEA structure, 152 communities part of a long-term triple-net lease, and 21 ongoing developments which will also be managed in a RIDEA structure following development conversion.

Barchester runs more than 200 care homes and seven registered hospitals in the U.K., operating more than 12,000 beds and employing 17,000-plus staff.

The portfolio is situated for future growth with current blended portfolio occupancy upwards of 70%. The 152 mature assets in particular are 90% occupied with strong coverage, 3.5% annual rent escalators and the ability for Welltower to reset rent every five years to capture additional upside, said Nikhil Chaudhri, co-president and CIO for Welltower.

Long duration strategy

The Barchester and HC-One portfolios are similar in quality to the REIT’s current portfolio, Mitra told analysts. The recapitalization of HC-One assets marks the beginning of a new chapter, or new operating income growth, as Welltower’s long duration strategy unfolds for the HC assets, he added. 

Welltower received £660M of loan repayments at 12.4% from HC.

“The equity ownership of these assets adds significant duration to our returns by deploying significant value-add capital and leveraging Welltower business systems and the best practices from our broader U.K. business,” noted Chaudhri.

Through several other transactions, Welltower is acquiring an additional nine assets under construction in the U.K.; the additional assets provide “significant growth opportunities embedded within this portfolio,” Chaudhri said of Barchester.

Overall, Welltower announced $23 billion in new deals either closed or under contract to close during Q3, mostly in the senior housing space. The REIT also announced a $10 million grant of stock for its front line workers at the company’s top-10 performing communities, through the Welltower Fellowship Grant program.

The REIT’s earnings beat analyst expectations, with $1.34 funds from operations beating analyst consensus estimates of $1.30, according to a note from BMO Capital Markets.

Guidance bumped up by 3.3%, driven by “massive transactional activity,” including $14 billion in investments and $9 billion in dispositions, analysts said. These transactions shift about 80% of future net operating income to senior housing.

Welltower’s portfolio consists of 376 long-term and post-acute care properties, its third-largest asset class behind seniors housing at 1,625 properties and outpatient medical at 446 properties. The REIT added to its skilled nursing assets in the beginning of the year, adding $1.2 billion in nursing home investments mostly involving Florida-based Aspire Healthcare as operator.