Welltower Announces Expansion of Strategic Partnership with Oakmont Management Group

Rhea-AI Summary

Welltower Inc. (NYSE: WELL) announced an expansion of its partnership with Oakmont Management Group, agreeing to acquire seven senior living communities in California for approximately $344 million. These properties include four rental and three continuing care retirement communities, with expected cost savings and revenue enhancement due to geographic overlap. The transaction, funded by cash and operating partnership units, aims for a high-single-digit unlevered IRR. This addition brings their partnership to 22 assets, with a strong growth pipeline anticipated in 2023.

Positive

• Acquisition of seven senior living communities valued at $344 million.
• Expected high-single-digit unlevered IRR from the investment.
• Geographic overlap with current properties anticipated to yield cost savings and revenue enhancement.
• Three recently opened rental communities expected to significantly improve occupancy and cash flow in 2023.

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• None.

TOLEDO, Ohio, May 10, 2022 /PRNewswire/ -- Welltower® Inc. (NYSE: WELL) or the "Company" today announced the deepening of its strategic partnership with Oakmont Management Group ("Oakmont"), a leading West Coast operator of Class A communities focused on specialized resident health and wellness programming. The Company has agreed to purchase seven senior living communities, subject to customary closing conditions, which Oakmont will operate under an aligned RIDEA 3.0 contract.

The seven properties are located in affluent markets in California and include four rental properties and three continuing care retirement communities (entry fee as well as rental), including Fountaingrove Lodge, the nation's first LGBTQ and Friends-focused CCRC. The portfolio has geographic overlap with the Company's current footprint, which is expected to result in cost saving and revenue enhancement opportunities by leveraging Oakmont's operating acumen and marketing efforts. Additionally, three of the traditional rental communities opened in 2021 and are anticipated to generate significant occupancy, margin, and cash flow growth in 2023 and beyond. The total investment will be approximately $344 million and is expected to generate a high-single-digit unlevered IRR. The transaction is anticipated to be funded through cash on hand and the issuance of operating partnership units.

Following this transaction, the Welltower-Oakmont partnership will comprise 22 assets across highly-desirable micro markets in California with an additional three properties in development. "We are excited about the meaningful expansion of our Oakmont-operated portfolio since the relationship was first seeded through the purchase of two properties in 2015," said Shankh Mitra, Welltower's CEO and CIO. "This rapid portfolio growth exemplifies our belief that best-in-class operators will gain significant scale in the post-pandemic environment, and we look forward to announcing further additions to our partnership in the future. Courtney and her team continue to meaningfully outperform both their underlying markets and the industry, and Oakmont was among the first senior housing operators in our portfolio to return to the 90% occupancy mark post-COVID."

"We are excited to meaningfully expand our strategic relationship with Welltower through the acquisition of these seven communities in our target markets," said Courtney Siegel, Oakmont President and CEO. "Welltower's well-capitalized balance sheet and unparalleled data analytics platform have allowed us to quickly realize efficiencies of scale, and we expect a further significant expansion in the relationship over the next decade through acquisition and development under our two companies' exclusive development agreement."

Following the completion of the transaction, the Company's year-to-date closed or announced pro rata gross investment activity will total approximately $2.0 billion. Mitra added, "2022 has marked one of the most active starts to a year for transaction activity in Welltower's history. We continue to have a robust pipeline of attractively priced investment opportunities across all of our major property types with the challenging labor environment, in combination with rising interest rates, increasing the motivation of various owners to sell."

Forward Looking Statement

This press release may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making 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 a result of various factors, including, but not limited to, those factors discussed in Welltower's reports filed from time to time with the SEC. Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

About Welltower

Welltower® Inc. (NYSE: WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate and infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower, a real estate investment trust ("REIT"), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing, post-acute communities and outpatient medical properties. More information is available at www.welltower.com.

About Oakmont Management Group

Oakmont Management Group, based in Irvine California, is a recognized leader in the senior living industry that manages a portfolio of communities under the Oakmont Senior Living and Ivy Living brand. Oakmont currently serves over 4,500 seniors across more than 50 communities in California and Nevada. Residents receive customized care services delivered in luxurious, resort-style settings. With an impressive array of high-quality amenities and compassionate team members, residents at Oakmont benefit from the finest senior living experience in the industry. For more information about Oakmont, visit www.oakmontseniorliving.com

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SOURCE Welltower Inc.

FAQ

What is the recent acquisition by Welltower (WELL)?

Welltower announced the acquisition of seven senior living communities in California, valued at approximately $344 million.

How much is Welltower investing in the new properties?

The total investment for the acquisition is approximately $344 million.

What is the expected return on investment for Welltower's new properties?

The investment is expected to generate a high-single-digit unlevered Internal Rate of Return (IRR).

How does this acquisition affect Welltower's portfolio?

The acquisition expands Welltower's partnership with Oakmont to 22 assets across desirable markets in California.

When was the announcement made regarding Welltower's partnership expansion?

The announcement was made on May 10, 2022.