Welltower raises Q2 normalized FFO guidance

Welltower Inc. raised its second-quarter normalized funds from operations estimate to between 75 cents and 79 cents per share from between 72 cents and 77 cents per share.

The S&P Capital IQ consensus estimate for second-quarter FFO per share is 74 cents.

In its latest business update, the healthcare real estate investment trust said it closed around $350 million of pro rata gross investments since its last business update on May 19.

These transactions include the acquisition of a portfolio of 22 seniors housing communities for a pro rata purchase price of $97 million, representing a significant discount to replacement cost, the REIT said in a release. The communities will be transitioned to new operating partner Pathway Senior Living. Welltower is under contract to close on a second tranche of seven seniors housing properties for a pro rata purchase price of approximately $50 million that is expected to close in the third quarter. The total transaction of approximately $147 million is expected to generate a low double-digit unlevered internal rate of return for the company.

Wellltower also acquired three seniors housing communities with an average age of four years for $102 million. The assets will be transitioned to StoryPoint Senior Living under a new triple net lease. The transaction is expected to generate an unlevered IRR in the high single-digit range.

The company also extended a $45 million mezzanine loan related to a separate entity's acquisition of a portfolio of skilled nursing facilities. The transaction is expected to generate a mid-teens unlevered IRR.

During the second quarter, the REIT recognized approximately $5.0 million of provider relief funds.