Welltower Shifts Billions Toward Senior Housing Growth
Welltower is making one of its most significant portfolio shifts to date, redirecting its focus from medical office buildings to rental senior housing amid surging demand from America’s aging population.
The company said it has $14 billion in new transactions closed or under contract to fund the pivot toward senior living—a market that, according to demographic experts, will add more than 4 million people aged 80 and older by 2030, bringing the total to 18.8 million.
The new acquisitions total more than 700 senior housing communities with 46,000 units, located primarily in the United States, the United Kingdom, and Canada. In a statement, Welltower described the activity as fueling its evolution into “a pure-play rental housing platform focused on the rapidly expanding seniors population.”
The company expects to fund the new activity with cash on hand and $9 billion in proceeds from asset sales, loan payoffs, and other capital recycling efforts. Welltower’s existing portfolio already includes more than 2,000 senior and wellness housing communities, though it remains unclear how many of the new transactions are included in that figure.
The other part of the strategy involves exiting much of its medical office business. Remedy Medical Properties and Kayne Anderson Real Estate announced a joint venture to acquire a portfolio of Welltower’s outpatient medical assets, totaling about 18 million square feet across 296 properties in 34 states. The companies did not disclose a purchase price, and it was not immediately clear whether the portfolio represents all of Welltower’s planned $7.2 billion of medical office dispositions.
Remedy will assume operational responsibilities for the properties, including leasing and management. Welltower will retain a preferred equity stake and a profits interest in the portfolio. The joint venture said the deal makes it the largest owner of outpatient medical buildings in the country, with 52.4 million square feet across roughly 1,104 properties in 44 states. Remedy also plans to add 170 former Welltower employees, bringing its total workforce to 500 across 60 offices nationwide.
Chief Executive Shankh Mitra called the initiative “Welltower 3.0,” saying it represents a renewed focus on long-term value creation. “By maintaining a long attention span and narrowing our focus on what truly matters, we believe we are better positioned than ever to achieve our North Star: the long-term compounding of per share earnings and cash flow growth for our existing owners,” Mitra said in prepared remarks.
The company added that the shift will accelerate development of the Welltower Business System, a “complex adaptive system” designed to help strengthen partnerships and operational efficiency among its operators.
Source: GlobeSt/ALM