Brookdale Senior Living struck a deal with Welltower to purchase 30 communities it leases for $290 million. The acquisition comprises 1,152 assisted living and memory care units. I read that as a big check to stop writing rent checks.
Brookdale also signed a four-year lease extension with Welltower for 39 communities that total 1,842 units. The deal allows Brookdale to exercise a fair-market-value purchase option on the portfolio at any time, rather than on a date tied to the lease's maturity. I see that as Brookdale keeping its options open on the rest of its Welltower portfolio.
Brookdale CEO Nick Stengle said the transactions are expected to add to the company's operational profitability and available cash.
Brookdale operates 529 communities in 41 states, and owns more than 75% of its communities, according to Senior Housing News.
Stengle said ownership allows Brookdale to capture the full benefit of future operating growth, while reducing long-term lease obligations.
Other senior housing deals have drawn top investors: BDT & MSD Partners acquired a majority stake in Sunrise Senior Living earlier this month. The Wall Street Journal reported that the buyer values that deal at more than $1 billion. Last month, American Healthcare REIT announced plans to spend more than $1.5 billion across a pair of transactions to acquire 16 senior housing facilities.
Senior housing occupancy hit 90% in August, but to maintain that level of availability, more than $1 trillion would need to be spent by 2050. NIC Map predicted 13 million more people will be in the market for senior housing within the next 15 years.