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Welltower Announces JV With Invesco Real Estate Worth $850M

Zacks Equity Research

Welltower Inc. WELL recently announced a joint venture (JV) with Invesco Real Estate, for a portfolio of 35 medical office buildings (MOBs), worth $850 million. Notably, Welltower, previously with the full ownership of the properties, will now retain 15% economic interest in the portfolio. 

Further, going by the recent presentation, where the company provided an update on its outpatient medical acquisition activities, it will receive $722.5 million from this JV.

Specifically, the MOBs, spanning 2.6 million square feet across 15 states, are 100% affiliated with health systems. Considering the portfolio’s average age of 19 years, the properties have been experiencing strong second-generation leasing and occupancy. In fact, the portfolio has a weighted average lease term of five years and is 89% occupied.  

Shankh Mitra, Welltower's executive vice president and chief investment officer noted, “Welltower's relationship driven investment approach contributes directly to the strength of our platform, and we think this relationship with Invesco will create significant value for our shareholders."

Welltower has an upbeat outlook for the health care space and is, hence, strategically deploying capital in its outpatient medical platform. Notably, there has been a significant increase in outpatient visits compared with in-patient admissions. 

Banking on this, the company is optimizing its portfolio and growing relationships with strategic health system partners and deploying capital in strategic acquisitions. In fact, year to date, Welltower closed and announced pro rata outpatient medical acquisitions amounting to $3.5 billion.  

To pursue these opportunities, the company is prudently accessing both public and private capital market across market cycles. This, in turn, helps maintain a decent balance-sheet position.

Given the favorable secular trends and growing need for value-based care, Welltower’s efforts to strengthen its outpatient medical footprint will drive long-term growth.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have gained 6.9%, as compared with the industry’s rally of 3.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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