Welltower (NYSE: WELL), one of the “Big 3” senior housing real estate investment trusts (REITs), is rumored to be in talks to purchase Quality Care Properties Inc. (NYSE: QCP).
Welltower and ProMedica, a nonprofit hospital network operator, reportedly made a $2 billion offer to acquire skilled nursing-focused QCP, Reuters reported Wednesday, citing people familiar with the situation.
This offer values Bethesda, Maryland-based QCP at approximately $20 per share, which is near its current market value, Reuters’ sources said.
Presently, QCP is in the process of taking over skilled nursing operator HCR ManorCare, which entered Chapter 11 bankruptcy protection in March after defaulting on its lease obligations in 2017.
ManorCare was based in Toledo, Ohio, which is also where Welltower and ProMedica are based.
QCP is set to lose its status as a REIT as part of this deal, which a federal bankruptcy judge recently approved.
Welltower’s skilled nursing foothold
Welltower currently owns 82 post-acute and long-term care properties managed by Genesis Healthcare (NYSE: GEN), a troubled skilled nursing operator that, with the REIT’s help, recently secured a $555 million credit facility.
Still, Welltower CEO Tom DeRosa believes that the skilled nursing industry will be reinvented in the coming years, and has used this belief to justify the REIT’s foothold in skilled nursing.
“[The SNF industry] will get reinvented, and as a health care REIT, we want the option to deploy capital in good structures around high quality real estate,” DeRosa said at the Citi 2018 Global Property CEO Conference in Hollywood, Florida.
“We will not hand you a leaking, steaming bag of real estate and say, ‘Here you go, do what you want to do with it, but I’m washing my hands of it,’” he said.
Written by Mary Kate Nelson
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