TOLEDO, Ohio — Welltower (NYSE: WELL), the largest owner of seniors housing in the United States, has announced plans to transition 147 skilled nursing facilities from its joint venture with ProMedica Senior Care to a new partnership with Integra Health.
In addition to transferring the operations, ProMedica will surrender its 15 percent interest in the assets and Integra will acquire that same stake. The financial terms of the move were not disclosed. ProMedica will also “provide significant working capital support for the new operators to ensure a smooth transition of patient care and operations,” according to Toledo-based Welltower.
Welltower released ProMedica from its skilled nursing lease obligation for these considerations, which total nearly $500 million. The 58 private-pay assisted living and memory care assets in the ProMedica joint venture will continue to be operated by ProMedica under a lease backed by the existing guaranty. ProMedica is currently up to date on its rent for the portfolio, having already paid its November obligations.
Welltower and Integra will enter into a master lease agreement which will result in a combined cash rent increase of over 4 percent to Welltower relative to the total current contractual rent from the existing ProMedica Senior Care joint venture. Year-one rent will be $167 million, of which Welltower’s share will be $142 million.
At closing, Integra will enter into a master lease with the joint venture on the portfolio with plans to bring in select regional operators across various states that will operate the facilities upon receiving regulatory approvals.
“We thank ProMedica for its partnership and the high-quality care provided to residents throughout the devastating COVID-19 pandemic,” says Shankh Mitra, Welltower’s CEO and CIO. “The communities have enjoyed a strong rebound in occupancy over the last six months but have been impacted by the elevated use of agency labor.”
Details on the properties themselves were not released. The transaction is scheduled to close before the end of the year.