- Welltower to transfer 147 skilled nursing assets from ProMedica Senior Care into an 85/15 joint venture between Welltower and Integra Health
- Welltower’s Combined Cash Rent Increases Over 4% Over Existing ProMedica Senior Care Joint Venture Total Current Contract Rent
- ProMedica Senior Care will continue to operate 58 private fee-paying seniors’ residences
TOLEDO, Ohio, November 7, 2022 /PRNewswire/ — Welltower® Inc. (NYSE: WELL), or the “Company”, today announced definitive agreements to effect the sale and transition of 147 skilled nursing facilities currently operated by ProMedica. As part of the agreement between Welltower and ProMedica, ProMedica will divest its 15% interest in the skilled nursing assets currently held in the existing 85/15 Welltower/ProMedica joint venture and will provide significant working capital support to the new operators in order to ensure a smooth transition. patient care and operations. Welltower released ProMedica from its obligation to hire skilled nursing for these considerations, which total nearly half a billion dollars. The assisted living and memory care assets of the ProMedica joint venture will continue to be operated by ProMedica under a lease backed by the existing security. Simultaneously, Welltower entered into a definitive agreement to sell the 147 skilled nursing facilities to an 85/15 joint venture between Welltower and Integra Health (“Integra”). Welltower and Integra will enter into a master lease agreement that will result in a combined cash rent increase of over 4% for Welltower over the current total contract rent of the existing ProMedica Senior Care joint venture.
“We thank ProMedica for its partnership and the high-quality care provided to residents throughout the devastating COVID-19 pandemic,” said Shankh Mitra, CEO and CIO of Welltower. “Communities have seen a strong rebound in occupancy over the past six months, but have been impacted by the increased use of agency labour. We are delighted to announce this partnership with Integra, as the Integra’s focused asset management and extensive network of strong regional providers will enable the new joint venture to build on ProMedica’s positive performance momentum, invest in communities and hire talent.We believe the transactions announced today today will benefit all Welltower stakeholders and ensure that top-notch resident care continues long into the future.Nursing rent, even under difficult operating and financial market conditions, validates our thesis of fundamental investment – a favorable base and endurance drive real estate returns over time.”
“We are delighted to announce this joint venture with Welltower,” said David Gefner, CEO of Integra Health. “These communities are located in extraordinary locations and constitute an important segment of the healthcare continuum. We aim to restore them to their former glory through focused asset management and a regional operator strategy focused primarily on the quality of care. We believe there is significant value to be created here for all stakeholders, especially residents and staff at the facility. We couldn’t be more excited about what lies ahead.
Integra Health Partnership
The Integra/Welltower joint venture is expected to be finalized before the end of 2022 and contains no financing contingencies. At closing, Integra will enter into a master lease with the portfolio joint venture with plans to bring in selected regional operators in various states to operate the facilities after receiving regulatory approvals. As these operators continue ProMedica’s recent efforts to improve the profitability of skilled nursing properties, their turnaround efforts will be supported by the aforementioned operating reserves provided by ProMedica. The head lease will be backed by a substantial guarantee as well as equity covenants, and Integra’s interest in the joint venture is subordinate to that of Welltower.
ProMedica senior housing portfolio
ProMedica will continue to lease and operate 58 privately paid assisted living and memory care communities under the existing 85/15 joint venture with Welltower. The lease will continue to be supported by the existing security, and ProMedica’s share of the rent will remain subordinate to Welltower’s. Following the transition of skilled nursing assets, we expect ProMedica’s senior care coverage and business credit to improve.
Financial implications
The transactions are expected to be neutral to slightly accretive to Welltower’s cash flow, leverage and earnings.
ProMedica has paid all contractual rent due to Welltower through November 2022, and we do not anticipate any disruption in rent payments for skilled nursing or assisted living facilities.
Forward-looking statement
This press release may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Where Welltower uses words such as “may”, “will”, “intend”, “should” , “believes”, “expects”, “anticipates”, “projects”, “estimates” or similar expressions that do not relate solely to historical matters, it makes forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower’s actual results to differ materially from Welltower’s expectations discussed in the forward-looking statements. This may be the result of a variety of factors, including, but not limited to, factors discussed in Welltower’s reports filed from time to time with the SEC. Welltower undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, or to update as to why actual results may differ from those projected in the forward-looking statements.
About Welltower
well tower® Inc. (NYSE: WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of healthcare infrastructure. The company invests with leading senior housing operators, post-acute care providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people’s well-being and the overall health care experience. Welltower, a real estate investment trust (“REIT”), holds interests in properties concentrated in key high-growth markets in the United States, Canada and the United Kingdom, including senior housing, retirement communities post-acute care and outpatient medical properties. More information is available at www.welltower.com.
SOURCE Welltower Inc.
