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Welltower (WELL) Disposes Medical Office Assets, Updates on Business
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Welltower Inc. (WELL - Free Report) announced the disposition of 24 asset outpatient medical portfolio for roughly $550 million in value. This was achieved through formation of a new joint-venture (JV) partnership with Wafra Inc., which is a global alternative investment platform.
While the first tranche of this transaction was completed last month, resulting in $154 million in pro rata proceeds, the second tranche is likely to close in late-December or early-January, the company mentioned.
With this move, Welltower will retain a 20% economic interest in the portfolio, while the Wafra Vehicles will own 80%. However, Welltower will carry on serving as asset manager and operator for the properties. These assets, which are 97% affiliated with health systems, are positioned in Texas, Florida, Minnesota, the Carolinas, Tennessee, California, Pennsylvania and Washington, among others.
Moreover, in the December business update, Welltower noted that its seniors housing operating (SHO) portfolio occupancy shrunk 160 basis points (bps) to 76.8% as of Dec 11, 2020, from 78.4% as of end of third-quarter 2020. Results reflect a decline in move-in activity amid a higher-than-expected rise in COVID-19 cases and shelter-in-place orders across the company’s footprint.
Further, the company guided that SHO portfolio spot occupancy is estimated to end the fourth quarter roughly 200 bps lower than Sep 30, 2020, due to the higher-than-expected rise in COVID-19 cases across its geographies.
Nevertheless, across the United States, the U.K., and Canada, regulatory authorities have granted authorization for usage of Pfizer/BioNTech’s COVID-19 vaccine. While the U.K. seniors housing staff started receiving initial doses of the Pfizer vaccine during the week of Dec 7, the distribution of COVID-19 vaccines in seniors housing communities across the United States will likely commence during the week of Dec 21, 2020, which is encouraging.
Also, regarding rent collections, Welltower noted that for its triple-net portfolio, it collected 98% of rent due in October and November, which is consistent with the third-quarter tally. Moreover, for its Outpatient Medical assets, the company collected or approved short-term deferrals for more than 99% of rent due quarter to date. This comprised 97% cash collections and 2% short-term deferrals.
Welltower expects same-store revenues per occupied room (REVPOR) growth at its SHO properties to be flat in fourth-quarter 2020 as compared with the July-September period. In addition, the company expects total SHO portfolio expenses to increase in the ongoing quarter from the prior quarter. Particularly, the company noted that so far in the quarter, COVID-related costs are trending above initial projections because of rise in coronavirus cases in its markets.
Such notable occupancy losses and elevated levels of expenses might hinder net operating income in upcoming quarters. Nevertheless, the dispositions through JV partnerships strengthen relationships with institutional real estate investors, help the company bank on solid demand for such assets in the market through monetization and bolster its liquidity.
CubeSmart’s (CUBE - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved up 0.6% to $1.65 over the past month. The company currently carries a Zacks Rank of 2 (Buy).
Rexford Industrial Realty, Inc. (REXR - Free Report) FFO per share estimate for the current year has been revised upward by 1.6% to $1.30 over the past two months. The company carries a Zacks Rank of 2, currently.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for ongoing-year FFO per share has moved 5.3% north to $1.20 in two months’ time. The company holds a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Welltower (WELL) Disposes Medical Office Assets, Updates on Business
Welltower Inc. (WELL - Free Report) announced the disposition of 24 asset outpatient medical portfolio for roughly $550 million in value. This was achieved through formation of a new joint-venture (JV) partnership with Wafra Inc., which is a global alternative investment platform.
While the first tranche of this transaction was completed last month, resulting in $154 million in pro rata proceeds, the second tranche is likely to close in late-December or early-January, the company mentioned.
With this move, Welltower will retain a 20% economic interest in the portfolio, while the Wafra Vehicles will own 80%. However, Welltower will carry on serving as asset manager and operator for the properties. These assets, which are 97% affiliated with health systems, are positioned in Texas, Florida, Minnesota, the Carolinas, Tennessee, California, Pennsylvania and Washington, among others.
Moreover, in the December business update, Welltower noted that its seniors housing operating (SHO) portfolio occupancy shrunk 160 basis points (bps) to 76.8% as of Dec 11, 2020, from 78.4% as of end of third-quarter 2020. Results reflect a decline in move-in activity amid a higher-than-expected rise in COVID-19 cases and shelter-in-place orders across the company’s footprint.
Further, the company guided that SHO portfolio spot occupancy is estimated to end the fourth quarter roughly 200 bps lower than Sep 30, 2020, due to the higher-than-expected rise in COVID-19 cases across its geographies.
Nevertheless, across the United States, the U.K., and Canada, regulatory authorities have granted authorization for usage of Pfizer/BioNTech’s COVID-19 vaccine. While the U.K. seniors housing staff started receiving initial doses of the Pfizer vaccine during the week of Dec 7, the distribution of COVID-19 vaccines in seniors housing communities across the United States will likely commence during the week of Dec 21, 2020, which is encouraging.
Also, regarding rent collections, Welltower noted that for its triple-net portfolio, it collected 98% of rent due in October and November, which is consistent with the third-quarter tally. Moreover, for its Outpatient Medical assets, the company collected or approved short-term deferrals for more than 99% of rent due quarter to date. This comprised 97% cash collections and 2% short-term deferrals.
Welltower expects same-store revenues per occupied room (REVPOR) growth at its SHO properties to be flat in fourth-quarter 2020 as compared with the July-September period. In addition, the company expects total SHO portfolio expenses to increase in the ongoing quarter from the prior quarter. Particularly, the company noted that so far in the quarter, COVID-related costs are trending above initial projections because of rise in coronavirus cases in its markets.
Such notable occupancy losses and elevated levels of expenses might hinder net operating income in upcoming quarters. Nevertheless, the dispositions through JV partnerships strengthen relationships with institutional real estate investors, help the company bank on solid demand for such assets in the market through monetization and bolster its liquidity.
Shares of this Zacks Rank #3 (Hold) have gained 10% over the past three months compared with the industry’s decline of 0.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
CubeSmart’s (CUBE - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has moved up 0.6% to $1.65 over the past month. The company currently carries a Zacks Rank of 2 (Buy).
Rexford Industrial Realty, Inc. (REXR - Free Report) FFO per share estimate for the current year has been revised upward by 1.6% to $1.30 over the past two months. The company carries a Zacks Rank of 2, currently.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for ongoing-year FFO per share has moved 5.3% north to $1.20 in two months’ time. The company holds a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>