Welltower (NYSE: WELL) is planning for more U.K. growth amid a historic period of investment activity for the company.
Between the start of the first quarter of 2021 and Feb. 14, the Toledo, Ohio-based real estate investment trust deployed $600 million worth of capital, amounting to “one of the most active starts” of any year in the company’s history, according to a business update issued Tuesday.
The Q1 2022 deals include a portfolio of eight Class-A, private-pay seniors housing communities with an average age of 11 years, Welltower disclosed in its Q4 2021 earnings announcement.
Welltower closed on $1.4 billion in pro rata investments during the fourth quarter of 2021, most of which closed late in the quarter.
At the same time, a real estate company based in the United Kingdom is investing in an ownership stake of one of Welltower’s largest operating partners, and now the two companies are forming a strategic venture.
Reuben Brothers has acquired UK operator Avery Healthcare, according to an announcement from the Toledo, Ohio-based real estate investment trust (REIT). The terms of the deal were not disclosed.
Under the transaction, Reuben Brothers is partnering with Welltower on a RIDEA JV development program that the REIT expects to “generate significant future growth opportunities through the development of the next generation of senior housing properties in the UK.”
Avery Healthcare currently has five properties in Welltower’s senior housing operating (SHO) portfolio along with 56 triple-net properties, amounting to 16% of Welltower’s senior housing triple-net net operating income. The two companies started their partnership together in 2013 with the sale/leaseback of 13 properties.
Welltower’s existing triple-net arrangement with Avery is remaining unchanged under the transaction and new JV.
With interests in private equity, venture capital and infrastructure and a track record of investing in alternative real estate classes, Reuben Brothers’ new “beachhead investment” is poised to see “strong secular tailwinds” in the coming decades, with a multi-year growth opportunity in both the U.S. and the U.K., according to Welltower.
“While many investors appropriately remain on the sidelines due to a near-term focus on Covid-19, the exponential multi-decade growth of the senior population has begun after a period of anemic population growth during the last decade,” Welltower CEO and CIO Shankh Mitra said. “The entry of Reuben Brothers, a highly sophisticated global investor, into senior housing, highlights the attractiveness of the opportunity that is ahead of us.”
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