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Deals & Dealmakers

Welltower closes on $1.25B portfolio buy


Welltower and CNL Healthcare Properties announced that Welltower has completed the purchase of a Class A health care facilities portfolio for $1.25 billion.

“We are extremely excited to close on this transaction and are pleased with the progress we have made to date that further enhances the value of these high-quality assets,” said Keith Konkoli, senior vice president and leader of Welltower’s Medical Office and Outpatient segment.

“By leveraging the strength of our platform, we have made substantial progress in extending ground leases, have experienced increased leasing velocity, and have identified additional opportunities to deploy capital that helps our health system partners improve care delivery to the communities they serve, further demonstrating our unique ability to drive long-term value through meaningful collaborations with the nation’s premier health systems.”

“The sale of our 55 building, Class A medical office portfolio to Welltower represents a strong, early value realization step for CNL Healthcare Properties and our approximately 45,755 stockholders,” said Stephen H. Mauldin, president and CEO of CNL Healthcare Properties. “This is the first sizeable transaction in our carefully orchestrated strategic alternatives process to provide liquidity to investors, and we are very pleased with the outcome.”

The portfolio comprises approximately 3.3 million square feet across 16 states positioned in strategic locations within major metropolitan markets. The facilities are affiliated with premier health systems including Novant, Memorial Hermann and Cleveland Clinic.

HFF Securities and Holliday Fenoglio Fowler advised CNL, a real estate investment trust that focuses on investing in senior care.

In 2018, HFF Securities was engaged as a strategic advisor to explore and execute potential liquidity alternatives for the REIT.

The HFFS team was led by Steve Hentschel and Ted Flagg as well as members of HFF’s national medical office capital markets team including Evan Kovac, Ben Appel, Andrew Milne, Zach Drozda and Anthony Frogameni. “This is the second largest medical office portfolio sale to ever transact based on total dollar volume,” said Milne. “The high quality portfolio primarily consists of properties positioned in major markets and on campuses of leading US healthcare systems.”

Welltower also invests in senior housing operators, providers and health systems.

Last year it partnered with Hines to build and assisted living facility at East 56th Street in Midtown. The partners are also planning a senior facility at 2330 Broadway on the Upper West Side.

Welltower is also the long-term capital partner for the Related Companies just announced Atria senior development in San Francisco.

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