TOLEDO, OHIO — Welltower Inc. (NYSE: WELL) has announced that the Toledo-based REIT is exiting the outpatient medical property management business following a portfolio sale to Remedy Medical Properties and Kayne Anderson Real Estate. The portfolio comprises approximately 18 million square feet of outpatient medical facilities across 296 properties in 34 states.
Welltower says that the transaction will total $7.2 billion and will be completed in tranches through mid-2026, with the first tranche selling for $2 billion.
This acquisition establishes the Remedy Medical and Kayne Anderson Real Estate partnership as the nation’s largest owner of outpatient medical buildings, with more than 52.4 million square feet across approximately 1,104 properties in 44 states.
“This acquisition reinforces our position as leading institutional investors in the outpatient healthcare sector and underscores our long-standing, successful partnership with Remedy,” says Al Rabil, CEO of Boca Raton, Fla.-based Kayne Anderson. “We remain focused on building upon our history of delivering superior risk-adjusted returns for investors, while advancing the delivery of high-quality healthcare across the country.”
Remedy Medical is assuming all operational responsibilities from Welltower, including property management and leasing functions. The portfolio was 94 percent occupied at the time of the acquisition announcement.
Welltower will retain a preferred equity position and an interest in the underlying portfolio as the firm continues to focus on the seniors housing sector.
Remedy Medical will add 170 employees from Welltower as part of the transaction, expanding its team to over 500 employees across 60 offices nationwide. Joe Magliochetti, chief investment officer of the Chicago-based company, says that the Welltower deal will expand Remedy Medical’s holdings by nearly 60 percent.
Financial advisors for Remedy Medical and Kayne Anderson included Citigroup Global Markets Inc., J.P. Morgan and Truist Securities Inc. The buyers are funding the acquisition with two separate loans.
Capital One NA is leading one loan as the sole bookrunner and joint lead arranger along with Ally Bank, J.P. Morgan and Truist Securities, with BMO Bank NA also a loan participant. Citigroup Global Markets Inc. is the lead arranger and bookrunner of the second loan, with J.P. Morgan and Goldman Sachs serving as participants.
Welltower is an S&P 500 company with more than 2,000 seniors housing and wellness communities in its portfolio. The REIT recently announced more than $14 billion in acquisitions in the senior living space, with assets concentrated in the United States and the United Kingdom. The company’s stock price closed on Monday, Oct. 27 at $182.61 per share, up from $130.57 a year ago, a nearly 40 percent increase.
— John Nelson