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Welltower: Q4 2019 Update, Near 52-Week Low, Two 20%-Plus Trades With Even Lower Breakevens

Mar. 07, 2020 9:15 AM ETWelltower Inc. (WELL)11 Comments


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Have you heard that phrase, "You're not getting any younger" recently? Or maybe you're hearing it more often, if you're in the Boomer generation. The fact is, the US population is definitely not getting any younger - 20% of the US population is projected to be over 65 by 2030 and beyond:

(Source: NY Times)

That's where companies like Welltower (NYSE:WELL) come in. It's a real estate investment trust which owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of senior housing and post-acute communities and outpatient medical properties.

WELL's biggest geographic concentration is in the US, which comprises ~41% of its core properties. It also has assets in Canada and the UK. California is its biggest concentration, at 21% of core assets, followed by NY/NJ at 9.3%:

(Source: WELL site)


WELL's Seniors Housing Operating properties is its largest segment by far, contributing ~45% of segment NOI in 2019. Its triple net leased properties accounted for ~20% of 2019 NOI, followed by Outpatient Medical, at 15.5%; Long Term/Post-Acute Care, at 11.6%; and Health System, at 7.6%:

(Source: WELL site)

WELL's management has been diversifying and upgrading the company's asset base during the past two years. They deployed $5B in 2019, with a particular emphasis on outpatient facilities, which makes sense, given the push by insurers away from in-hospital stays, due to high costs.

WELL closed or announced more than $3.5 billion of outpatient medical acquisitions in 2019 at a blended year one cash cap rate of 5.6%. These acquisitions will contribute 450 properties and more than 8 million square feet to the company's platform, as it continues to expand through accretive off-market acquisitions. It now owns the biggest commercial platform of medical offices leased in the U.S.

They also

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This article was written by

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in WELL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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