Portfolio of 38 ultra-luxury seniors housing communities and nine entitled development parcels.
Welltower, a real estate investment trust that invests in healthcare infrastructure, announced that it is under contract to acquire Amica Senior Lifestyles. The portfolio consists of 38 ultra-luxury seniors housing communities and nine entitled development parcels, including a 31-property in-place portfolio valued at C$3.2 billion, from Ontario Teachers' Pension Plan for aggregate consideration of C$4.6 billion.
The irreplicable and trophy portfolio is located within highly affluent neighborhoods in Toronto, Vancouver and Victoria. In conjunction with the transaction, Welltower also announced the formation of a long-term strategic partnership with Amica Senior Lifestyles ("Amica"), a preeminent seniors housing owner/operator of category-defining luxury communities with a long-term track record of substantial value creation through superior operational and development acumen.
"We are delighted to announce the acquisition of the Amica portfolio, the highest quality senior housing portfolio in North America," said Shankh Mitra, Welltower's CEO. "These communities will join the top echelons of the Welltower portfolio, reflected by their location within the most desirable neighborhoods in all of Canada and ultra-luxe amenities and finishes. Against a backdrop of rapidly growing demand and limited new supply, we expect the portfolio to drive outsized revenue and cash flow growth in the coming years." Mr. Mitra added, "We are also excited to announce the establishment of a long-term partnership with the Amica management team. Amica Senior Lifestyles Co-founder, Robert Ezer, and CEO, Jens Cermak, share our vision on delivering a killer value proposition for residents through the offering of premium hospitality and care and providing a dynamic environment for site level employees to grow and thrive."
The transaction includes 31 in-place properties comprised of 24 stabilized communities and seven recently opened properties still in lease up. The in-place properties are being acquired at a substantial discount to estimated replacement cost. The stable Amica assets have exhibited significant pricing power with RevPOR growth even outperforming Welltower's overall SHO portfolio over the past five years. Welltower and Amica have paved the path for a significant future expansion of Amica's ultra-luxury, higher acuity product within their target Toronto, Vancouver, and Victoria neighborhoods through a long-term strategic partnership and Amica's continued management of the properties under a highly aligned RIDEA 5.0 contract.
In addition to the in-place portfolio, Welltower plans to acquire seven properties currently under construction that have been meticulously planned and curated throughout development timelines that have stretched nearly a decade. The under-construction properties will be acquired upon the achievement of certificates of occupancy, which is expected to occur in stages between 2025 and 2027. This structure allows Welltower to eliminate development risk while enabling the Company to own trophy assets with untrended stabilized average RevPOR of over C$12,000. The nine development parcels Welltower plans to acquire are located in highly affluent and supply constrained neighborhoods and have been entitled through elongated and onerous processes that have spanned over five years on average, providing Welltower with significant future optionality.
The Amica communities provide a continuum of care including independent living, assisted living, and memory care, allowing residents to age in place and helping to drive an average resident length of stay of 3-4 years. Amica has an unparalleled track record in managing and developing luxury seniors housing communities, enabling it to successfully target highly affluent neighborhoods while serving an unmet need of a rapidly aging population through its higher acuity offering given the Canadian senior housing industry's greater focus on independent living. As part of the transaction, Welltower will acquire a minority interest in Amica's highly regarded management company with the Amica management team owning the majority interest, driving further alignment.
"We are thrilled to announce our long-term partnership with Welltower, which shares our passion for providing the highest quality care and services to the seniors population. We also believe that we will be key beneficiaries of Welltower's industry-leading data science capabilities which will help scale our platform," said Jens Cermak, Amica's CEO. "Our premium communities appeal to an affluent and sophisticated population across Canada where seniors are empowered to live with freedom, optimism and peace of mind. Our portfolio has witnessed exceptional growth in recent years, and we strongly believe that this momentum can be sustained well into the future."
At closing of the in-place portfolio and development parcels, which is expected in the fourth quarter of 2025, subject to customary regulatory approvals, Welltower will assume C$560 million of CMHC-insured, debt with an average interest rate of 3.6% and a four-year weighted average maturity.
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