Pathway to Living is dramatically growing its senior housing portfolio with the addition of 22 communities in a transaction with Welltower (NYSE: WELL).
“This partnership with Welltower is one that, when combined with our design and construction platform and middle-market management expertise, will bring an elevated experience to seniors across the 22-property portfolio,” Pathway to Living CEO Jerry Finis told Senior Housing News. “Looking ahead, the competition in the sector will intensify and present new challenges, so we believe our expertise in the sector will continue attracting attention from potential partners keeping Pathway to Living on its growth plan into the future.”
The Toledo, Ohio-based real estate investment trust (REIT) completed the acquisition of the 22-property portfolio for a purchase price of $97 million, which represents a “significant discount to replacement cost,” the company stated in a business update issued Tuesday. Newmark (NYSE: NMRK) handled the sale, vice chairman Chad Lavender told SHN.
Welltower is also under contract to purchase another seven-community senior housing portfolio for approximately $50 million, a deal that is expected to close in in the third quarter of 2021.
A representative for Welltower declined to elaborate on the portfolio addition when reached by SHN.
The move is set to nearly double Pathway’s senior housing portfolio, which numbered 29 communities before the transaction. Pathway operates in six states, according to its website.
Real estate firm Waterton bought a controlling stake in Pathway to Living in 2019. The company has pursued a multi-brand strategy in building out its portfolio, with its Azpira Place, Aspired Living and Victory Centre properties serving different price points.
Pathway to Living CEO Jerry Finis traces the company’s origins back to the development of two communities in Illinois in 1997. The company’s original focus was in affordable senior housing, but that later evolved into a focus on private-pay senior housing.
In more recent years, Pathway has helped lead the wellness charge in the senior living industry with its Viva operating framework. The provider was also among the first in the U.S. to begin building wellness centers into communities, according to COO Maria Oliva.
Welltower has in 2021 broadened and deepened its ties to senior housing operating companies. For instance, the Toledo-Ohio based real estate investment trust (REIT) in May inked a new partnership with Treplus Communities that promises to “expand the best-in-class Treplus product offering into Welltower’s senior living portfolio.”
Welltower also in February announced it had acquired from Healthpeak Properties (NYSE: PEAK) a 790-unit portfolio of senior housing communities operated by Harbor Retirement Associates (HRA).
In recent weeks, leaders with Welltower have reported an uptick in lifestyle-driven consumers, which CEO Shankh Mitra said was a pleasant surprise.
“I honestly thought you were going to see more needs-based residents coming first and probably lifestyle residents would wait another six months,” Mitra said last month at the RBC Capital Markets Global Healthcare Conference.
Welltower in April saw the first occupancy gains in its SHO portfolio since the start of the pandemic. As of June 4, spot occupancy in the REIT’s senior hosing operating portfolio spot registered at 73.8% The REIT still has a hill to climb to get back to its pre-pandemic occupancy total of 85.6% in January, 2020.
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