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Welltower to purchase 55 properties from CNL Healthcare for $1.25B

Welltower Inc. agreed to purchase 55 class-A medical office and outpatient facilities from fellow healthcare real estate investment trust CNL Healthcare Properties Inc. for $1.25 billion.

The 3.3 million-square-foot portfolio is part of a 63-property portfolio that CNL Healthcare identified for sale in 2018 after it decided to pursue strategic alternatives. It is 94% occupied, and 92% of the properties are affiliated with major health systems, including Novant, Memorial Hermann and Cleveland Clinic.

CNL Healthcare said it intends to market the remaining eight properties in the portfolio for sale, as well as six skilled nursing facilities in Arkansas, and will use the proceeds from the 55-asset sale to repay debt and pay closing costs and other related expenses. Subject to board approval, the nontraded REIT may also use the proceeds to rebalance corporate borrowings and make a special distribution to shareholders.

After the sale closes, CNL Healthcare will continue to own and manage a private-pay seniors housing portfolio of 87 communities.

The transaction is expected to close during the first half, subject to customary closing conditions and governmental and other third-party approvals.

HFF Securities LP and KeyBanc Capital Markets Inc. are serving as strategic financial advisers to CNL Healthcare.