Welltower registers 26.3% YOY drop in Q2 Nareit FFO per share

Welltower Inc. disclosed Nareit funds from operations attributable to common stockholders for the second quarter of $248.8 million, or 59.0 cents per share, a fall of 26.3% on a per-share basis from $335.6 million, or 80.0 cents per share, in the 2020 second quarter.

Nareit is the U.S.-based trade association for real estate investment trusts and publicly traded real estate companies.

Normalized FFO attributable to common stockholders for the quarter declined 8.1% year over year on a per-share basis to $330.2 million, or 79.0 cents per share, from $361.0 million, or 86.0 cents per share.

Total revenues for the quarter amounted to $1.14 billion, a 4.0% fall from $1.19 billion in the year-ago period.

The S&P Capital IQ consensus FFO-per-share estimate for the quarter was 77 cents.

In reporting results, the healthcare real estate investment trust said it expects Nareit and normalized FFO attributable to common stockholders in the range of 78 cents to 83 cents per share for the third quarter.

For the third quarter, the S&P Capital IQ FFO-per-share estimate is 79 cents.

In the second quarter, the REIT established a relationship with seniors housing communities operator Pathway to Living and bought 22 properties in Illinois and Ohio for a pro rata investment amount of $100 million. In July, the company closed on a second tranche of seven seniors housing properties from the same seller for a pro rata purchase price of approximately $50 million, which were added to an existing relationship with Frontier Management.

Welltower also expanded its relationship with Oakmont Senior Living by acquiring the Ivy Living at Otay Ranch community in San Diego for a pro rata purchase price of $35 million. Subsequent to quarter end, the REIT entered into a strategic partnership with Oakmont Management Group that is expected to expand the size of the parties' existing portfolio, which spans nine assisted living and memory care communities.

Under its joint venture with ProMedica, the company sold another eight properties during the second quarter for pro rata proceeds of $47 million. The parties expect the sale of the remaining properties to close in the second half of 2021.

Separately, Welltower also sold three properties for $75 million.

In the second quarter, the company bought four seniors housing communities for $107 million, to be operated by existing operators Sunrise Senior Living, Chartwell Residences, Sparrow Living and a new relationship with Enclave Companies.

In July, the REIT entered into a new 95/5 joint venture with Aspect Health and simultaneously bought six medical office buildings in infill markets across the New York City metropolitan area for a pro rata investment amount of $99 million. The company will have a 10-year exclusivity agreement with Aspect Health, allowing the joint venture to fund future development projects in the New York City metropolitan area.

The parties' first development partnership will be a 60,000-square-foot outpatient medical building just outside of New York City. The property will be master leased to an undisclosed health system for 20 years and groundbreaking is expected in early 2022.

Since the start of the second quarter, Welltower sold 20.1 million common shares under its at-the-market program via forward-sale agreements at an initial weighted average price of $79.69 apiece.

The forward ATM sales are expected to generate gross proceeds of about $1.6 billion, of which 2.8 million shares were settled during the second quarter for $212 million of gross proceeds.