Toledo, OH-based Welltower Makes $44.4MM Bet in Sacramento’s Suburbs

Northern California, Welltower, Roseville, Carmichael, Oakmont at Westpark, St. George Medical Center, Kohlberg Kravis Roberts, KKR, Canada Pension Plan Investment Board, CPPIB, Related
Oakmont at Westpark

By Vladimir Bosanac

Looking to expand its footprint into Northern California’s aging population, Toledo, Ohio-based Welltower, a real estate investment trust that invests in healthcare infrastructure, paid $41 for a pair of assets in Roseville and Carmichael. The company spent $32.4 million on Oakmont at Westpark, a luxury retirement community in Roseville, and another $12 million (around $226 per square foot) on St. George Medical Center, a medical office building in Carmichael.

Oakmont at Westpark is located at 2400 Pleasant Grove Blvd. in Roseville and provides a rich assortment of amenities including specialized meals, excursions, a salon, a private movie theater and resident gardens. The property features large living units and access to retail and additional services in its vicinity. 

St. George Medical Center is located at 6620 Coyle Ave. in Carmichael, and it is a 53,000-square-foot medical office building developed in 1970. The property was renovated in 2019, and it is located directly across from Mercy San Juan Hospital, a 370-bed care facility operated by Dignity Health. It is roughly 85 percent occupied, according to the property’s web page on CommercialCafe. Several suites ranging from 750 square feet to nearly 1,400 square feet are available in the property.

Sacramento’s population continues to grow. In the twenty-year period between 2000 and 2020, the city’s population grew nearly 30 percent to 536,635. The city is projected to grow by another 54 percent to 2.2 million by 2060. In terms of its population’s age, the biggest groups of residents are between 25 and 30 years of age, however, its population pyramid shows a relatively flat population discretion between age groups. This could mean that the need for services such as the two properties provide will only increase in the future. 

Welltower was founded in 1970 by Bruce Thompson and Frederic D. Wolfe as the first healthcare-focused real estate investment trust (REIT), according to the company’s webpage on Wikipedia. Originally named Health Care Fund, the company changed its name to Health Care REIT in 1985. Health Care REIT became Welltower in September 2015. Welltower is based in Toledo, Ohio. The company also has offices in Dallas, Texas; Santa Monica, California; New York City; London; and Toronto. Welltower has about 1,400 properties in the United States, Canada and the United Kingdom.

The company has been in an expansion mode over the past decade, and it has partnered with a number of institutional investors to help grow its portfolio across North America and the UK. In 2012, the company invested $5 billion in targeting private-pay senior housing and medical office buildings. In 2013, the firm spent $4.3 billion to acquire nearly all the real estate assets of Sunrise Senior Living. In a related deal, Sunrise’s property management business was recapitalized and spun-off to a partnership including Kohlberg Kravis Roberts & Company (KKR), affiliates of Beecken Petty O’Keefe & Company and Coastwood Senior Housing Partners LLC for $130 million, according to Wikipedia. Following that, it purchased 47 retirement communities in Canada from Revera, and in 2015 it purchased four Aspen Healthcare hospitals in London. That same year, Welltower formed a joint venture with the Canada Pension Plan Investment Board (CPPIB) to acquire a portfolio of medical office buildings in Southern California and another one to buy senior housing run by Discovery Senior Living in Florida. 

In April 2018, Welltower and ProMedica announced the acquisition of Quality Care Properties and HCR ManorCare for $4.4 billion. In February 2020, Related announced that it would partner with Welltower and Atria to develop a 44-story mixed-use tower in Hudson Yards.

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