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Welltower (WELL) Boosts Flexibility With $500M Notes Offering
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Welltower Inc. (WELL - Free Report) has announced the closing of its offering of 500 million in 2.050% senior unsecured notes due January 2029. The move is aimed at bolstering its flexibility to manage balance sheet efficiently as well support its growth endeavors.
The company intends to use the net proceeds from the offering for general corporate purposes, which include repayment of debt and investment in health care and seniors housing properties.
Markedly, the company’s efforts to magnify focus on senior living asset class are commendable. Recently, this healthcare REIT behemoth has inked an agreement to acquire Holiday Retirement’s 86-property seniors housing portfolio for $1.58 billion. In the first 12 months post-closing, the transaction is estimated to be 10 cents per share accretive to Welltower’s normalized funds from operations.
The move is a strategic fit for Welltower, given the substantial cash flow growth opportunities amid the post-COVID recovery in seniors housing fundamentals. As occupancy growth accelerates from near-trough levels of 76.3% as of Jun 20, the portfolio in discussion is likely to provide substantial net operating income growth in the future.
Moreover, capital improvements are expected to fuel significant growth in property-level performance, even while maintaining Welltower’s all-in basis (roughly $165,000-$170,000 per unit) at a substantial discount to replacement costs.
Besides, Welltower continues to undertake several steps, including the monetization of its healthcare assets, to improve its balance sheet strength and enhance liquidity by tapping the debt and equity markets.
The company is estimated to receive a total of $838 million in pro rata disposition proceeds through Jun 30, 2021 and an additional $618 million in disposition proceeds in the second half of 2021 from assets held for sale as of first-quarter 2021. It also announced closing of an expanded $4.7-billion unsecured revolving line of credit, replacing its existing line of credit of roughly $3 billion.
In the wake of aging baby boomers, we expect the company’s communities to absorb vacancy at a faster pace. Besides, its focus on portfolio optimization and synergistic collaborations with health systems to invest in the next-generation assets of health and wellness care delivery looks encouraging.
However, expenses might continue flaring up due to additional health and safety measures adopted in light of the pandemic. Hence, amid such rising expenses, the company is likely to witness strain on margins in the time to come.
Shares of this Zacks Rank #3 (Hold) company have gained 29.1% over the past six months, outperforming the industry's growth of 17.6%.
Geo Group Inc’s (GEO - Free Report) Zacks Consensus Estimate for the current-year FFO per share moved marginally north in the past month. The company carries a Zacks Rank of 2, at present.
BRAEMAR HOTELS & RESORTS INC.’s (BHR - Free Report) FFO per share estimate for the ongoing year has been revised upward by 4.5% in the past month. The company carries a Zacks Rank of 2, currently.
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
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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
Image: Bigstock
Welltower (WELL) Boosts Flexibility With $500M Notes Offering
Welltower Inc. (WELL - Free Report) has announced the closing of its offering of 500 million in 2.050% senior unsecured notes due January 2029. The move is aimed at bolstering its flexibility to manage balance sheet efficiently as well support its growth endeavors.
The company intends to use the net proceeds from the offering for general corporate purposes, which include repayment of debt and investment in health care and seniors housing properties.
Markedly, the company’s efforts to magnify focus on senior living asset class are commendable. Recently, this healthcare REIT behemoth has inked an agreement to acquire Holiday Retirement’s 86-property seniors housing portfolio for $1.58 billion. In the first 12 months post-closing, the transaction is estimated to be 10 cents per share accretive to Welltower’s normalized funds from operations.
The move is a strategic fit for Welltower, given the substantial cash flow growth opportunities amid the post-COVID recovery in seniors housing fundamentals. As occupancy growth accelerates from near-trough levels of 76.3% as of Jun 20, the portfolio in discussion is likely to provide substantial net operating income growth in the future.
Moreover, capital improvements are expected to fuel significant growth in property-level performance, even while maintaining Welltower’s all-in basis (roughly $165,000-$170,000 per unit) at a substantial discount to replacement costs.
Besides, Welltower continues to undertake several steps, including the monetization of its healthcare assets, to improve its balance sheet strength and enhance liquidity by tapping the debt and equity markets.
The company is estimated to receive a total of $838 million in pro rata disposition proceeds through Jun 30, 2021 and an additional $618 million in disposition proceeds in the second half of 2021 from assets held for sale as of first-quarter 2021. It also announced closing of an expanded $4.7-billion unsecured revolving line of credit, replacing its existing line of credit of roughly $3 billion.
In the wake of aging baby boomers, we expect the company’s communities to absorb vacancy at a faster pace. Besides, its focus on portfolio optimization and synergistic collaborations with health systems to invest in the next-generation assets of health and wellness care delivery looks encouraging.
However, expenses might continue flaring up due to additional health and safety measures adopted in light of the pandemic. Hence, amid such rising expenses, the company is likely to witness strain on margins in the time to come.
Shares of this Zacks Rank #3 (Hold) company have gained 29.1% over the past six months, outperforming the industry's growth of 17.6%.
Key Industry Picks
Mack-Cali Realty Corporation’s Zacks Consensus Estimate for 2021 FFO per share moved up 1.8% over the past week. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Geo Group Inc’s (GEO - Free Report) Zacks Consensus Estimate for the current-year FFO per share moved marginally north in the past month. The company carries a Zacks Rank of 2, at present.
BRAEMAR HOTELS & RESORTS INC.’s (BHR - Free Report) FFO per share estimate for the ongoing year has been revised upward by 4.5% in the past month. The company carries a Zacks Rank of 2, currently.
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
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>