Welltower to Acquire 25-Community Senior Apartment Portfolio for $502M

Welltower (NYSE: WELL) has entered into a definitive agreement to purchase a 25-property senior apartment portfolio from real estate firm Calamar for $502 million.

The communities are located on the East Coast and in the Midwest, and carry average monthly rents of $1,300 per unit and an average resident length of stay above five years, according to a June 6 business update from Welltower.

The communities also “maintained high levels of occupancy throughout Covid, with favorable annual renewal rate increases demonstrating unmet demand for moderately priced senior apartments,” the update continued.

Calamar, which has offices in Wheatfield, New York; Bedford, New Hampshire; and Olathe, Kansas, is a real estate development firm with a history that includes medical and commercial offices, multifamily communities and 55-plus, active adult communities under the brand name Connect55+.

Welltower leaders expect Calamar will manage the properties under the brand, subject to a traditional multifamily management contract.

Connect55+ has 29 operational communities throughout the Midwest and Northeast regions of the U.S. with four more currently under construction, according to the company’s website. 

With the acquisition, Welltower will own total of nearly 10,000 units of age-restricted and age-targeted rental housing in the U.S., significantly expanding its holdings in the space.

Welltower adds Calamar to its growing senior housing platform that includes partners such as Treplus Communities, Sparrow Partners, Cogir Management and Oakmont Management Group, with nearly $750 million in new capital deployments quarter-to-date and $2.8 billion of capital year-to-date.

The announcement came after market close on Tuesday along with news that the Toledo, Ohio-based REIT adjusted its outlook for the second quarter of 2022.

Welltower tightened its guidance, going to an expected adjusted funds from operations (FFO) of $0.84-0.87 per share, which is up from the previous guidance of $0.82 to 0.87 per share. 

The company maintained its momentum from the first quarter of 2022, with an 80 basis point increase for its senior housing operating portfolio (SHOP) occupancy rate since that time.