Welltower Inc. (NYSE: WELL) has announced its acquisition of a 25-community active adult portfolio from Affinity Living Communities. This acquisition is part of larger plans to create a programmatic development agreement with Affinity. The portfolio, which consists of 3,900 units mainly located in the Pacific Northwest, will be managed by Affinity even after the acquisition.
The transaction will significantly expand Welltower’s wellness housing portfolio, adding around 25,000 units overall. Welltower CEO Shankh Mitra stated that these communities are designed to address the growing demand for wellness-focused rental housing for seniors, providing amenities and targeted social programming at moderate price points.
Welltower is acquiring the portfolio for approximately $249,000 per unit, which is a considerable discount to the replacement cost. The communities have an average age of less than eight years, with a near-60% operating margin and lower capital expenditure burden. The transaction is being funded with cash on hand and $523 million of “below-market rate debt” carrying an average interest rate of 3.8% and average maturity of nine years.
Affinity’s President Darin Davidson sees the partnership with Welltower as a milestone that will enable them to enhance and extend their mission of creating thriving communities for their residents. The transaction is expected to close over the next several months.
