Welltower Buys Seven West Coast Communities for $344M

by Jeff Shaw

TOLEDO, Ohio — Welltower Inc. (NYSE: WELL) has expanded its strategic partnership with Oakmont Management Group, a West Coast operator of Class A seniors housing communities.

Welltower agreed to purchase seven senior living communities, subject to customary closing conditions, which Oakmont will operate under a RIDEA contract.

The seven properties are located in affluent markets in California and include four rental properties and three continuing care retirement communities (both entry fee and rental), including Fountaingrove Lodge, the nation’s first LGBTQ-focused CCRC.

The portfolio has geographic overlap with Welltower’s current footprint, which the company expects will result in cost saving and revenue enhancement opportunities. Additionally, three of the traditional rental communities opened in 2021.

The total investment will be approximately $344 million. Welltower plans to fund the acquisition through cash on hand and the issuance of operating partnership units. The seller was not disclosed.

Following this transaction, the Welltower-Oakmont partnership will comprise 22 assets across 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,” says 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 [Siegel, Oakmont’s president and CEO] and her team continue to meaningfully outperform both their underlying markets and the industry, and Oakmont was among the first seniors housing operators in our portfolio to return to the 90 percent occupancy mark post-COVID.”

Following the completion of the transaction, Welltower’s year-to-date closed or announced pro rata gross investment activity will total approximately $2 billion.

“2022 has marked one of the most active starts to a year for transaction activity in Welltower’s history,” says Mitra. “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.”

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