The real estate investment trust will now enter a joint venture with Integra Health to operate the skilled nursing assets.
Last week ProMedica, a nonprofit health and well-being organization headquartered in Toledo, Ohio, announced plans to transfer real estate and management responsibilities of its skilled nursing facilities to Welltower, a real estate investment trust, also headquartered in Toledo.
According to a press release, the transfer will resolve the operating losses ProMedica had been experiencing within its senior care division, and is also part of a larger effort to improve the organization's financial performance.
"By engaging in this transaction, we will be able to increase focus and resources on the other areas of our health system as we continue to provide high quality, compassionate care and invest in our communities and dedicated caregivers," Arturo Polizzi, president and CEO of ProMedica, said in a statement.
In addition to the sale and transition of ProMedica's 147 skilled nursing facilities, per its agreement with Welltower, it will also surrender 15% interest in the skilled nursing assets currently held within an existing joint venture and provide "significant working capital support" to ensure a smooth transition of patient care and operations.
Along with the news of the transfer, Welltower also announced that it would be concurrently entering into an 85/15 joint venture with Integra Health, and will enter into a master lease agreement , which will result in a combined cash rent increase of over 4% to Welltower. The venture is expected to close before the end of the year.
"We thank ProMedica for its partnership and the high-quality care provided to residents throughout the devastating COVID-19 pandemic," Shankh Mitra, Welltower's CEO and CIO, said in a statement. "We are excited to announce the partnership with Integra as Integra's focused asset management and vast network of strong regional providers allow the new joint venture to build on ProMedica's positive performance momentum, invest in all the communities, and hire talent."
"We are excited to announce this joint venture with Welltower," David Gefner, CEO of Integra Health, said in a statement. "These communities are in extraordinary locations and comprise an important segment of the health care continuum. We aim to bring them back to their previous glory through focused asset management and regional operator strategy with a primary focus on quality of care."
"We believe there is significant value to be created here for all stakeholders, most importantly the facility residents and staff. We could not be more excited about what lies ahead."
ProMedica is transfering all real estate and management responsibilities for its skilled nursing facilities to Welltower.
Welltower is concurrently entering into an 85/15 joint venture with Integra Health, which will include a master lease agreement where Welltower will receive a combined cash rent increase of over 4%.