Welltower has formed a new relationship with Colorado-based Balfour Senior Living.
Welltower and Balfour plan to enhance the high-end senior living experience by expanding upon Balfour’s best-in-class design and accommodations.
Welltower acquired a six-community portfolio located in the Denver and Boulder metropolitan statistical areas, including Balfour’s downtown Denver flagship community, Riverfront Park, and the recently developed Lavender Farms, which opened in April. The portfolio was acquired for $308 million in partnership with Balfour.
Balfour entered into Welltower’s next-generation management contract, creating optimal alignment between the partners. As part of the portfolio purchase, Welltower has received exclusivity on Balfour’s future acquisition and development pipeline, as well as an option to acquire up to a 34.9 percent interest in Balfour’s management company. Several development initiatives are currently under way in high-barrier-to-entry East Coast markets, rapidly expanding upon what is already a strong partnership between Welltower and Balfour.
In other news, Welltower has acquired five purpose-built, private pay seniors housing properties recently developed and managed by Sunrise Senior Living. Welltower’s investment in the properties is $285 million.
Welltower previously funded 34 percent of the development cost for the communities through its joint venture and ownership of Sunrise Senior Living. The five communities were opened in 2017 and 2018, and upon acquisition had an occupancy of 67 percent. The communities are located in dense infill locations within the Washington, D.C., San Francisco and San Diego metropolitan areas and are leasing up rapidly. Two communities are eight- and nine-story mid-rise buildings in the affluent Washington, D.C., submarkets of Chevy Chase and Bethesda. The remaining three communities represent the latest in Sunrise’s mansion prototype and are the product of multi-year entitlement periods. Sunrise will continue to manage the communities under an incentive-based management contract.
In addition, Welltower entered into a definitive purchase agreement under which it will acquire a 43-acre, six-building, 270,000-square-foot medical office campus in Berkeley Heights, N.J., for $140 million. The campus will be master leased by Summit Medical Group. This campus is the largest and most comprehensive of five “hubs” in Summit’s 80-location hub-and-spoke model and will bring Welltower’s total Summit-leased footprint to more than 500,000 square feet.
