Welltower (NYSE: WELL) CEO Tom DeRosa is stepping down, and executive Shankh Mitra is filling his place.
DeRosa is leaving his role as chairman and CEO after leading Welltower for more than six years, the Toledo, Ohio-based real estate investment trust (REIT) announced Monday afternoon. The move was effective Monday. Mitra, formerly Welltower’s chief operating officer and chief investment officer, will also fill a seat on the company’s board of directors.
In April 2020, DeRosa renewed his employment agreement through 2023. But, the time now is right to make the leadership transition, he stated in Welltower’s announcement of the news.
“After careful thought and consideration of the company’s current position and opportunities ahead, the board and I have decided that now is the right time for me to hand the reins to Shankh,” DeRosa said in a statement. “There is no executive better suited to lead Welltower at this critical juncture.”
Welltower had promoted Mitra to the roles of vice chair and COO in April with the intent that he would ultimately succeed DeRosa as CEO, according to lead independent director Jeffrey Donahue.
“Since the start of the pandemic, Shankh’s unyielding focus on portfolio performance and optimization has never been more evident,” Donahue said. “We have the utmost confidence in Shankh’s strategic vision and leadership and believe he is the right person to guide Welltower as it continues to successfully navigate the current environment and pursue the exciting next phase of growth for the company.”
Mitra will keep his CIO title and continue to oversee Welltower’s capital allocation and operator relationships.
“While COVID-19 has presented us with many challenges, the past six months have underscored Welltower’s core value proposition: to serve as a strategic, nimble and creative capital allocator by leveraging our operator relationships and data platform,” Mitra said in a statement about his new role. “We are encouraged by the relative stabilization of our operating performance and incredibly excited about the opportunity to deploy capital in attractive investment opportunities.”
The REIT also named its new chairman as Kenneth Bacon, who had worked as independent director on the Board since 2016. As chairman, Bacon will lead Welltower’s board of directors and work with Mitra and other company leaders.
Under DeRosa’s tenure, Welltower helped lead the charge toward making senior housing and care a more integrated part of the U.S. health care system. The company in 2018 acquired nursing home chain HCR ManorCare — soon to be rebranded under the new “ProMedica Senior Care” banner — in a $4.4 billion deal with nonprofit health system ProMedica. Welltower purchased the properties associated with the former ManorCare portfolio as part of an 80-20 JV split with ProMedica.
The company has also worked to grow its presence in the middle-market senior living landscape in recent times. Welltower last year acquired a portfolio of three dozen Clover communities. And earlier this year, it launched a new senior housing brand called welltowerLIVING geared toward wellness and social connectivity for the 55-plus crowd and at a lower price point than many of of its other private-pay senior living communities.
DeRosa said that he believed Mitra was the right person to take the reins now.
“Shankh and I have worked shoulder-to-shoulder over the last five years and I have witnessed his strong leadership, relentless focus on organizational efficiency and unparalleled approach to capital allocation,” DeRosa said in the release. “I’m truly excited for Welltower’s future and will be cheering for the company’s continued success in the years to come.”
The announcement Monday was accompanied by a new disclosure about Welltower’s finances and operations.
Occupancy for the company’s senior housing operating (SHO) portfolio declined approximately 30 basis points in the month of September, landing at about 78.4% as of Sept. 30. But the SHO portfolio posted consecutive occupancy gains during the last two weeks of September, marking the company’s first back-to-back period occupancy gains since the start of the Covid-19 pandemic.
Welltower collected 98% of rent due in its triple-net portfolio during the third quarter of 2020.