Welltower is slimming down its medical office footprint in favor of a senior housing spree.
The real estate investment trust is working on a $6 billion sale of 18 million square feet of outpatient medical space, Bisnow reported. It’s part of a broader reorientation the company is calling “Welltower 3.0.”
The Toledo-based REIT detailed the shift in its third-quarter earnings, where it also announced $14 billion in acquisitions across more than 700 senior communities in the U.S., U.K. and Canada. The firm reported $1.8 billion in third-quarter acquisitions specifically. Indeed, funds from operations jumped about 21 percent year over year this past quarter to $1.34 per share.
The massive medical office sale, which totals 296 buildings across 34 states, is being made to Chicago-based Remedy Medical Properties, according to a release from Remedy and Kayne Anderson Real Estate. Remedy paid $2 billion for the first tranche in October, and the rest are expected to close by mid-2026.
The portfolio is 94 percent leased and the acquisition will boost its medical office footprint by nearly 60 percent. The transaction includes 170 Welltower employees moving over to Remedy.
Once complete, Welltower’s medical office portfolio will primarily consist of long-term, triple-net leased assets, leaving behind the operationally intensive properties it’s unloading.
The company said proceeds from the divestiture, along with credit paydowns and cash reserves, will fund its senior housing acquisitions. The biggest of those deals is a $6.9 billion buyout of 111 U.K. communities from operator Barchester Healthcare, a portfolio where occupancy is hovering near 80 percent.
In the U.S., Welltower has closed or signed contracts for $4 billion worth of East Coast senior housing assets covering 150 communities.
Welltower, whose market cap tops $120 billion, has seen its stock surge roughly 40 percent this year.
Its pivot comes as demographic demand strengthens — the leading edge of the baby boom generation is now hitting its 80s — and private investors pour into the sector.
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