Welltower and Canada-based Chartwell Retirement Residences have dissolved their joint venture, first announced in 2021. Welltower said this week in a business update that the agreement to dissolve will benefit both parties.
Under the terms of the dissolution, the Toledo, OH-based real estate investment trust will acquire the remaining interests in 23 senior living properties while simultaneously exiting 16 properties through the sale of its interest to Chartwell. The retained properties are expected to stabilize at almost 10% yield and generate a low-double-digit unlevered internal rate of return, Welltower said.
The dissolution is expected to be finalized in 2024. Welltower’s retained properties will be transitioned to Cogir Management and to the Welltower/Cogir private letter ruling platform, “which is expected to unlock meaningful NOI [net operating income] upside,” according to the REIT.
In other news shared by Welltower, momentum in occupancy in the REIT’s senior housing operating portfolio, or SHOP, carried over from the third quarter into October.
Welltower said that the current supply-demand imbalance affecting the REIT and the industry is expected to support sustained occupancy growth in the SHOP portfolio throughout the rest of the year and beyond.
“Welltower’s operating platform initiatives, active portfolio management and attractive demand/supply conditions are resulting in favorable trends across all geographies,” the company said.
Since Oct. 30, the REIT has completed $3 billion in acquisitions and has another $1 billion under contract. Nov. 6, Welltower had announced $2 billion in agreements.
The acquisitions are “expected to drive meaningful per share value for existing shareholders given attractive basis, operational upside and significant and irreplicable value-add from Welltower’s operating platform,” the REIT said in this week’s update.
Earlier this month, Welltower sold 17.5 million shares of common stock to BofA Securities and Goldman Sachs & Co. The funds will go toward properties currently under contract for general corporate purposes, the REIT said.
