TOLEDO, Ohio--(BUSINESS WIRE)--UNITE HERE issued the following letter to shareholders of Welltower, Inc:
Dear Welltower Shareholder:
Welltower (NYSE:HCN) announced plans to purchase 19 properties operated by Vintage Senior Living for $1.15 billion. Welltower has disclosed that it plans to use a RIDEA structure to lease these facilities. Upon completion of this acquisition, over 40% of Welltowner’s portfolio will be under a RIDEA structure, which will increase the company’s exposure to market volatility and unforeseen capital expenditures.
- Welltower’s decision to grant operating contracts for seven of the 19 facilities to Sunrise Senior Living increases the company’s exposure to its second largest operator, which carries inherent risks. Welltower’s largest operator, Genesis, recently entered into to a settlement with the Department of Justice for $52.7 million to resolve allegations of fraud.
- Vintage Senior Living is a privately held company that has operated the facilities. As a result investors may lack crucial information about the performance of the portfolio, historic cash flows, historic capital investments, and other data that would inform their analysis of the transaction.
We encourage investors to ask:
- Is increasing Welltower’s RIDEA exposure in the best interests of investors?
- In a heavily regulated industry, what are Welltower’s plans to achieve operational efficiencies with this portfolio that would offset the inherent risks of RIDEA properties?
- What is the basis for valuing the portfolio at an average price of $444,015 per unit?
About UNITE HERE – UNITE HERE is a labor union that represents over 270,000 workers throughout North America.