Welltower (NYSE: WELL) is reloading its”growth bazooka” with fresh ammunition to fund senior housing acquisitions amid what CEO Shankh Mitra recently called “the best environment for investments that we have ever seen.”
The Toledo, Ohio-based company on Monday announced a sale totaling $1.5 billion in gross proceeds from a public offering of 17.5 million shares of common stock. The effort will in part help fund senior living and skilled nursing property investment for the real estate investment trust (REIT), “including those currently under contract and for general corporate purposes.”
Welltower’s stock fell by 2.83% on the news to rest at $85.65 per share by the time markets closed on Tuesday.
On Oct. 30, the company announced $1 billion of fully-funded investments, which was preceded by a $75 million net investment following the dissolution of the Revera joint venture.
With Monday’s announcement, Welltower announced it had entered into purchase agreements totalling $2 billion. In total, Welltower conducted $3 billion of acquisitions based off of $2.4 billion and $600 million in senior housing and skilled nursing industries, a news release states.
The net proceeds could be invested in “short-term, investment grade, interest-bearing securities, certificates of deposit or indirect or guaranteed obligations of the United States,” the release notes.
In commentary on Welltower’s recent public offering, Stifel Managing Director Stephen Manaker said tracking the company’s “frenetic acquisition pace can be daunting.”
“Interestingly, the $2 billion is referred to as property, while the $1 billion is referred to as investments. This could indicate that some of the $1 billion of investments is senior (debt and/or preferred equity),” Manaker wrote.
Manaker noted some key context of Welltower’s investment cadence, with the company acquiring $5.1 billion of assets in 2021 and $3 billion last year, “…so we believe they have the platform to handle this volume,” Manaker added.
During the company’s recent third quarter earnings call, Mitra said he and Welltower leadership viewed its investment activity through a “a three-dimensional lens” of “risk, reward and duration.”
“Our balance sheet strength and flexibility gives us the opportunity to remain on offense or provide shelter if the economic environment meaningfully worsens next week,” Mitra said during the 3Q23 earnings call.
BofA Securities Inc. and Goldman Sachs & Co. have underwritten the offering.
Companies featured in this article:
BofA Securities, Goldman Sachs and Co., Revera, Stifel, Welltower
