Welltower’s senior living results for the second quarter exceeded expectations, CEO Shankh Mitra said Tuesday on the Toledo, OH-based real estate investment trust’s quarterly earnings call.
“All in all, we finally exceeded $1 billion of annualized net operating income in our senior housing segment for the first time since COVID and believe we have a ton of growth left in the tank,” he said.
During the second quarter, the REIT entered into agreements to dissolve its existing joint venture relationship with Revera across the United States, the United Kingdom and Canada. The transactions include acquiring the remaining interests in 110 properties from Revera while simultaneously selling interests in 31 properties to Revera.
Mitra called the restructuring with Revera “mutually beneficial.”
According to a business update issued Monday, in July 2023, Welltower “bought the remaining interests in 10 highly desirable, well-located properties that are currently under development or have been recently developed by Sunrise. As part of the transaction, Welltower sold its minority ownership in 13 properties, meaningfully reducing floating rate construction loan exposure and further simplifying the balance sheet.”
Additionally, the REIT said, “Welltower transitioned 28 properties located in California from Sunrise to Oakmont to further expand regional densification with a proven local-market sharpshooter. Welltower sold its 34% ownership in Sunrise Senior Living management company to Revera.”
Welltower continued to expand its relationship with Brighton, MI-based StoryPoint Senior Living through the acquisition of an additional community in Ohio for approximately $35 million.
The REIT also is launching a new senior living operating platform in Canada with Cogir Management. This is Welltower’s first such venture since the private letter ruling it received late last year.
“I predict this operating JV will witness rapid growth in the very near future,” Mitra said.
Cogir will manage communities in Quebec and Southeast Ontario; Optima and Levante will manage communities in Alberta, British Columbia and Ontario.
Additionally, Welltower sold its minority interests in 12 US properties and one Canadian development project. Operations for two recently developed, now wholly owned, properties, as well as an additional 26 existing 100% owned properties transitioned to Oakmont Management Group, which Welltower said in its business update “had realized outsized net operating growth after assuming management of properties in its core markets.”
For additional coverage of the earnings call, see McKnight’s Senior Living.