Welltower has already been the most prolific acquirer in the seniors housing M&A market in the last couple of years, but the REIT shows no signs of slowing, according to its latest earnings report and business update. In the second quarter, Welltower completed $1.7 billion of pro rata gross investments, including $1.4 billion in acquisitions and loan funding and $251 million in development funding. Contrary to most investors these days, that included the opening of 13 development projects, including partial conversions and expansions, for an aggregate pro rata investment amount of $214 million. On the sales side, Welltower also completed around $578 million of property dispositions and loan repayments. That capital will likely get recycled quickly.
One of the larger acquisitions of the quarter involved a portfolio of seniors housing communities bought for $271 million. Combined with providing a first mortgage loan collateralized by a portfolio of seniors housing properties for $456 million, Welltower invested in 12 high-quality seniors housing communities encompassing approximately 2,000 units. The REIT announced that as part of its previously announced transition of 89 Holiday by Atria communities to six of its existing operating partners, it has completed the operational transition at 69 properties, so far. The remaining Atria properties are expected to be transitioned by the end of the third quarter.
With an eye towards growth, Welltower reached agreements to convert 47 triple-net leased properties to RIDEA structures in the second quarter, giving the company access to operational upside at the properties. Welltower completed 11 of these transitions during the second quarter and expects to complete the remainder during the third quarter.
The REIT is also priming itself for further growth with its liquidity, closing on an expanded $5.0 billion senior unsecured revolving credit facility in July, which replaced its $4.0 billion existing line of credit. The new facility comprises a $3.0 billion revolving line of credit maturing in June 2028 that can be extended for an additional year and a $2.0 billion revolving line of credit maturing in June 2029. The revolving lines of credit will bear interest at a borrowing rate of 72.5bps over the adjusted SOFR rate and an annual facility fee of 12.5bps. In addition, Welltower OP issued $1.035 billion aggregate principal amount of 3.125% exchangeable senior unsecured notes maturing July 15, 2029, unless earlier exchanged, purchased or redeemed. The notes will pay interest semi-annually in arrears on January 15 and July 15 of each year. This capital, combined with the proceeds from its asset dispositions and loan repayments, puts Welltower in a position to continue its aggressive acquisition and investment strategy.
The Board of Directors also announced a 10% increase in the quarterly dividend per share to $0.67 per share; another sign of confidence. Subsequent to quarter end, Welltower announced $1.1 billion in pro rata acquisitions under contract, in addition to the previously announced $3.8 billion of investment activity closed or under contract to close as of June 3, 2024. Transactions under contract and not yet closed are subject to customary closing conditions.
