Welltower officials expressed optimism Tuesday, with occupancy ticking up and a notable integration effort going better than expected.
Leaders with the Toledo, OH, real estate investment trust gave the rosey outlook during the company’s third quarter earnings call. Shankh Mitra, executive VP and chief investment officer, noted improvements in occupancy, particularly in the memory care communities.
Earlier this year, Welltower acquired the assets of Quality Care Properties for $1.95 billion. And in a separate deal, nonprofit, Toledo-based hospital system ProMedica acquired QCP tenant ManorCare. In an 80/20 joint venture, Welltower and ProMedica subsequently leased 218 ManorCare properties to the hospital operator for 15 years.
During the call, Mitra said integration between the two healthcare giants is going better than expected and “is on target.” The deal closed in July.
“ProMedica and HCR leadership now expect higher synergies than we expected previously,” he told investors, declining to elaborate further during the Q&A portion of the call. He said that leaders CEO Randy Oostra and division president Steve Cavanaugh will further flesh out details during their investor conference on Dec. 4 in New York City.
Despite some recent negative press, with ProMedica laying off 100 employees over the summer, and seeing its credit rating downgraded, Mitra expressed optimism as the moving parts of the deal continue to come together.
“We are encouraged by the green shoots in the skilled nursing industry,” he said, later adding, “We continue to believe we’ll create extraordinary value for our shareholders in the long-term from this transaction, perhaps even more than we anticipated.”
Overall, Welltower reported a net income of $64.3 million for the third quarter on revenues of $1.24 billion, beating industry estimates.
