We all know that Welltower has been selling a few billion of seniors housing assets just like Healthpeak Properties has. But the difference is that Welltower is still buying. Not only that, they picked up a 790-unit portfolio operated by Harbor Retirement Associates for $132 million, or $167,000 per unit. The seller? Healthpeak (see story above). Even though the portfolio had negative lease coverage, we are sure Welltower is looking at that well-below-replacement-cost pricing. 

But Welltower needs to pay attention to its own operating portfolio, where occupancy continues to decline. The average census was 77.3% in November, falling to 76.3% in December and 74.9% in January. As of February 5, it was 74.4%. The trend has not been their friend. Management expects the decline to continue this quarter. 

The much-maligned sale/leaseback structures have been performing much better, with 97% of rent due from operators collected in the fourth quarter. Let’s hope that will continue. 

They also completed $528 million in development funding with an expected stable yield of 7.6% and $200 million of loan funding at a yield of 7.3%. In addition, they converted 18 development and expansion projects for a total pro rata amount of $348 million and an expected stable yield of 8.6%. A few more returns like these and Welltower may be able to increase its dividend.