Key Takeaways
- • Welltower Inc. (NYSE: WELL) made $1.2 billion in skilled nursing investments in the first quarter of 2025, according to executives who discussed the figures on the REIT's earnings call.
- • The majority of that spending went to a single transaction: 48 skilled nursing facilities acquired in February for a total purchase price of $990.9 million, including $750.8 million in cash and $240 million in common stock, per a 10-Q filing.
- • Aspire Healthcare, a Florida-based operator, was brought in as the new tenant under a long-term triple-net master lease, after a prior version of the deal had fallen through amid market softness.
- • Welltower co-president and CIO Nikhil Chaudhri said the deal was renegotiated to a price reduction of a couple hundred million dollars in the REIT's favor, and described skilled nursing as a credit business focused on borrower ability to repay.
- • Welltower reported first-quarter FFO of $1.20 per share, above the $1.15 consensus cited by BMO Capital Markets, with skilled nursing same-store NOI up 2.8% year over year.
Summary
Welltower Inc. (NYSE: WELL) invested $1.2 billion in skilled nursing properties during the first financial quarter of 2025, executives of the real estate investment trust said on Tuesday while discussing the investments and the Aspire Healthcare transaction. Co-President and Chief Investment Officer Nikhil Chaudhri characterized skilled nursing as a "credit business," in which investments are underwritten primarily on the borrower's ability to repay, whether structured as debt or triple-net leases.
The largest transaction of the quarter, accounting for the majority of the $1.2 billion, involved Florida-based Aspire Healthcare as the new operator. According to a 10-Q filing cited by the publication, Welltower acquired 48 skilled nursing facilities in February for a total purchase price of $990.9 million, consisting of $750.8 million in cash and $240 million in common stock. The properties are leased to Aspire under a long-term triple-net master lease. Welltower began working with Aspire in 2023 on a turnaround portfolio.
Chaudhri said the deal was a "broken transaction" that had previously collapsed amid softness in the market. Welltower stepped in with a dual-path solution that supplied an operator and a "certainty to close," and used the failed deal to negotiate a price adjustment of "a couple $100 million" in its favor. He said the portfolio generates enough cash flow to cover one year's rent and has occupancy in the mid-60% range.
For the quarter overall, Welltower reported $2.8 billion of pro rata gross investments, including $2.7 billion in acquisitions and loan funding and $142 million in development funding. According to analysts at BMO Capital Markets, Welltower beat funds from operations (FFO) per share consensus of $1.15 with first-quarter FFO of $1.20. BMO also reported that skilled nursing same-store net operating income grew 2.8% year over year, while coverage declined 2 basis points quarter over quarter to 1.56 times. Welltower shares closed Tuesday at $151.48, up $2.43 or 1.63%, according to Yahoo Finance.
The largest transaction of the quarter, accounting for the majority of the $1.2 billion, involved Florida-based Aspire Healthcare as the new operator. According to a 10-Q filing cited by the publication, Welltower acquired 48 skilled nursing facilities in February for a total purchase price of $990.9 million, consisting of $750.8 million in cash and $240 million in common stock. The properties are leased to Aspire under a long-term triple-net master lease. Welltower began working with Aspire in 2023 on a turnaround portfolio.
Chaudhri said the deal was a "broken transaction" that had previously collapsed amid softness in the market. Welltower stepped in with a dual-path solution that supplied an operator and a "certainty to close," and used the failed deal to negotiate a price adjustment of "a couple $100 million" in its favor. He said the portfolio generates enough cash flow to cover one year's rent and has occupancy in the mid-60% range.
For the quarter overall, Welltower reported $2.8 billion of pro rata gross investments, including $2.7 billion in acquisitions and loan funding and $142 million in development funding. According to analysts at BMO Capital Markets, Welltower beat funds from operations (FFO) per share consensus of $1.15 with first-quarter FFO of $1.20. BMO also reported that skilled nursing same-store net operating income grew 2.8% year over year, while coverage declined 2 basis points quarter over quarter to 1.56 times. Welltower shares closed Tuesday at $151.48, up $2.43 or 1.63%, according to Yahoo Finance.
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