Here are a few more details about Welltower’s pending acquisition from CNL
TOLEDO, Ohio — As those who follow the medical office building (MOB) space undoubtedly well know by now, Welltower Inc. (NYSE: WELL) announced last week that it has agreed to a $1.25 billion MOB portfolio acquisition. The pending deal calls for the Toledo, Ohio-based, publicly traded healthcare real estate investment trust (REIT) to acquire 55 MOBs across 16 states with a total of 3.3 million square feet from Orlando, Fla.-based CNL Healthcare Properties, a non-traded healthcare REIT.
The Jan. 2 announcement did not identify specific properties or provide much more information. But an “Outpatient Medical Acquisition Update” slide presentation posted to the Welltower website provides details not included in the news release.
In addition, CNL posted to its website a letter to its shareholders that summarizes the pending sale of the 55 MOBs and explains what it plans to do with another eight MOBs in its portfolio, which Welltower has not agreed to buy — but we will get to that a little later.
As noted above, the Jan. 2 announcement did not name any specific properties that are to be changing hands, but about a dozen of them were highlighted in the Welltower “Update” presentation, including:
In a Jan. 2 letter to its shareholders, after explaining the pending Welltower transaction, CNL wrote: “We will continue to hold the remaining eight of the 63 properties for sale as we pursue separate efforts to market and sell them. The company believes that selling the eight properties separately from the larger transaction should assist to maximize value for shareholders.
“Furthermore, we will continue to market for sale our six skilled nursing facilities in Arkansas., which included post-acute care facilities and specialty hospitals, that were initially marketed by CNL.”
CNL Healthcare Properties, which focuses on seniors housing and healthcare facilities, is monetizing the MOBs as part of its “ongoing process to pursue strategic alternatives to provide liquidity for its shareholders,” according to the Jan. 2 news release.
After the sale, CNL Healthcare Properties’ portfolio will be focused primarily on seniors housing facilities, of which it owns 87 communities in 31 states.
The announcement of the deal comes during an incredible run by Welltower which, after sitting on the sidelines in early 2018, has announced billions of dollars of investments in recent months.
Some of those investments have included a $400 million acquisition of 23 MOBs from Brookfield, Wis.-based Hammes Partners; a $79.4 million purchase of the 160,190 square foot Medical Pavilion at Howard County in Columbia, Md.; and $1 billion in off-market transactions comprising, according to a Welltower news release, “11 separate seniors housing and medical office transactions.”
“Through the strategic acquisition of 55 high-quality medical office buildings from CNL Healthcare Properties, we continue to accretively expand our outpatient medical and health system portfolio,” Shankh Mitra, Welltower’s chief investment officer, said in the Jan. 2 news release.
For a copy of the Jan. 2 news release, please visit HREInsights.com.
For a copy of the Jan. 2 CNL letter to its shareholders, please visit CNLSecurities.com.
For a copy of the Welltower “Outpatient Medical Acquisition Update” presentation, please visit Welltower.com.
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