Welltower has expanded its strategic partnership with StoryPoint Senior Living with the acquisition of three distinct senior living portfolios in Michigan, Ohio and Tennessee. StoryPoint will operate the communities under an aligned RIDEA 3.0 contract.
The investment will amount to roughly $548 million and will be funded through the issuance of operating partnership units, assumed debt and cash on hand.
The portfolios encompass 2,787 units across 33 senior housing communities. Three quarters of the units are assisted living and memory care units, while the remaining units are independent living.
Due to COVID-19-imposed operational challenges, and with most communities still in the lease-up phase at the beginning of the health crisis, the portfolios were significantly impacted, similarly to the entire senior housing industry.
Nonetheless, thanks to steady recovery across the industry, the average occupancy rate across the communities is currently at 63 percent and is expected to maintain growth well into 2023 under the new management and current economic conditions.
According to Welltower’s 2021 fourth-quarter report, the company’s portfolio spot occupancy increased approximately 70 basis points during the last quarter of the year, to 77.7 percent. At the end of last year, overall spot occupancy increased around 510 basis points from the pandemic low of 72.6 percent in March 2021.
A solid partnership
Welltower’s partnership with StoryPoint dates back to 2019, when the company managed merely two Welltower communities. Following the current transactions, StoryPoint will manage a total of 74 communities, according to prepared remarks from Welltower’s CEO & CIO Shankh Mitra.
The current portfolio deals will bring Welltower’s total pro-rata gross investments to $6.8 billion since October 2020 and year-to-date transactions to $1.2 billion. Last June, the firm acquired an 86-property senior housing portfolio from Holiday Retirement for $1.58 billion. These properties are managed by Atria Senior Living.