Earlier this week, Welltower announced it had acquired 22 seniors housing communities in partnership with Pathway to Living for a purchase price of $97 million, amid a flurry of other announcements. Now, more details have emerged on the deal.
Totaling 1,103 units, the portfolio consists of 156 independent living, 835 assisted living and 112 memory care units. That results in a per-unit price of $87,900 per unit. Welltower had said that the deal went for well below replacement cost, and they were not kidding. The REIT plans on investing an additional $15,000 to $20,000 per unit, which should help improve the portfolio’s value. Newmark handled the deal.
The seller was an undisclosed debt fund that had foreclosed on the properties and sold them to Welltower, and there is another portfolio slated to sell in the third quarter consisting of seven seniors housing property. The pro rata purchase price for that deal totals approximately $50 million, or about $110,000 per unit. Combined, the two transactions are expected to generate a low-double digit unlevered IRR to WELL. These are the transactions that they have been talking about doing.