Welltower Transitioning 89 Holiday By Atria Communities To 6 Operators

Welltower has announced it is transitioning 89 senior living communities managed by Atria to six other operators that include Arrow Senior Living, Cogir, Discovery Senior Living, QSL, Sagora and StoryPoint.

As of June 3, Welltower had transitioned 27 of the 89 properties, with plans to transition the rest in the third quarter of the year.

“The transitions will create strong geographic density with best-in-class regional operating partners across the U.S. that have a proven track record in markets where the properties are located,” the Toledo, Ohio-based real estate investment trust (REIT) wrote in a business update Monday morning.

Atria worked with the REIT to “reach an agreement benefiting both parties that allows for the transition of the Welltower Holiday portfolio to their new operators,” according to a statement.

“We made significant contributions on enhancing operational efficiency, standardizing processes, and executing on an extensive refurbishment initiative across the portfolio. Welltower has determined the right next step for their Holiday communities is for them to be managed under a regional approach with multiple operators,” a representative from Atria told Senior Housing News. “We are committed to supporting the impacted communities, residents, employees, and new operators through the transition process. This agreement allows us to continue to invest in our strong platform and take advantage of the increased demand seniors housing is experiencing.”

Welltower has already transitioned 14 properties in Texas and the Southern U.S. to Sagora Senior Living and 13 properties in the Midwest to StoryPoint, according to the REIT’s business update. Those properties have an average occupancy rate of 73% and 74%, respectively.

Arrow Senior Living is picking up six properties in the U.S. plains state region, while Cogir is taking on 20 in the Pacific Northwest. Discovery Senior Living is slated to manage 23 communities in California and Florida, and QSL is set to manage 13 in the U.S. Southeast. The properties carry an average occupancy rate of 84%, 77% and 78%, respectively. All of those transitions are slated to close in the third quarter of the year.

The properties also carry potential net operating income (NOI) upside of “nearly $47 million upon achievement of pre-COVID occupancy and margin [and] $20 million+ of additional upside beyond pre-COVID stabilization if underwritten economics are achieved,” according to Welltower.

In 2021, Welltower acquired 86 former Holiday properties that the company owned and self-managed in an acquisition valued at $1.58 billion. At the same time, Atria acquired the management services of the former operator.

This is a developing story that is being updated.

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