Welltower Inc. HCN, the Toledo, OH-based, health care real estate investment trust (“REIT”), recently announced the pricing of $500 million worth senior notes. This move is expected to provide further flexibility to the company’s already sturdy balance sheet position, going forward.
Welltower plans to utilize the proceeds generated from the offering to repay advances under the primary unsecured credit facility as well as meet general corporate needs. The latter include investment in health care and seniors housing properties. Residual proceeds may be utilized for short-term, investment grade, interest-bearing securities, certificates of deposit, or funding of indirect or guaranteed obligations of the U.S. The offering is likely to close on Oct 19, 2015, subject to certain customary conditions.
Welltower primarily invests in seniors housing and health care real estate. As of Jun 30, 2015, the company’s portfolio consisted of around 1400 properties, spread across 46 states in the U.S., the UK and Canada.
Notably, for second-quarter 2015, the REIT reported normalized funds from operations (“FFO”) of $1.09 per share. The figure surpassed the Zacks Consensus Estimate by a penny and also came 3 cents ahead of the year-ago quarter tally. Results were positively impacted by a rise in same-store net operating income (“NOI”) and quality of the investments made.
Welltower currently carries a Zacks Rank #3 (Hold).
Investors interested in the REIT industry may consider stocks like CoreSite Realty Corporation COR, Gramercy Property Trust Inc. GPT and W. P. Carey Inc. WPC. All three stocks sport a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely accepted and reported measure of the performance of REITs, is derived by adding depreciation, amortization and other non-cash expenses to net income.
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