In addition to promoting Shankh Mitra to CEO on Monday, Welltower (NYSE: WELL) announced its second nine-figure senior housing sale in the last week.
The Toledo, Ohio-based health care real estate investment trust (REIT) is under contract to sell an 80% stake in a six-property, 507-unit portfolio in Massachusetts for $200 million. That represents a 4.9% cap rate on March trailing 12-month net operating income. Average portfolio occupancy was 88% during that timeframe.
The buyers are a joint venture of Boston-based private equity real estate firm Taurus Investment Holdings and Northbridge Asset Management. The operator, Northbridge Senior Housing, will remain on board. The buyers also hold an option to buy Welltower’s remaining share in the next 12 months at a fixed price, based on the sale price.
The communities are located in Burlington, North Dartmouth, Newbuyport, Needham, Plymouth and Tewksbury, with an average age of 19 years, according to Welltower’s Q2 2020 property list. The portfolio was under a RIDEA management agreement.
The Northbridge transaction comes nearly a week after multiple reports suggested Welltower sold its stake in 10 communities in California, Oregon and Washington managed by Seattle-based Merrill Gardens for $702 million. Welltower confirmed that deal in a release on Monday, along with the Northbridge deal.
While the Merrill Gardens sale was originally announced in February, before the coronavirus pandemic, the Northbridge portfolio was sourced and closed during Covid-19, Newmark Knight Frank (Nasdaq: NMRK) Vice Chairman Chad Lavender told Senior Housing News. Lavender and NKF Vice Chairman Ryan Maconachy, who co-lead the firm’s healthcare and alternative assets division, represented Welltower in the Northbridge deal, which is expected to close this week.
The deal proves that demand for high-quality senior housing product remains during Covid-19, Mitra said in a release.
“As we’ve demonstrated through a series of transactions in recent months, our ability to execute large-scale dispositions at compelling prices during an unprecedented period is a testament to the desirability of Welltower’s high-quality assets, the strength of our partnerships, and our execution capabilities,” he said.
Additionally, the REIT announced a $402 million joint venture with Invesco Real Estate in 20 outpatient medical office buildings. Welltower will retain a 15% ownership stake, and is responsible for leasing and property management duties.