While diversified by property type and tenant, Welltower has a high concentration of senior housing at more than 60% of its NOI. Further, its top ten tenants supply nearly half its NOI. That concentration increases risk, making it something investors should monitor.
The pandemic had a significant impact on senior housing because of the effect the virus had on older populations. As a result of that, plus a ban on new admissions across many regions where it operates, occupancy within its senior housing operating portfolio declined sharply last year. The company also incurred additional expenses to buy personal protective equipment and other supplies. Those factors had a significant impact on the NOI generated from these facilities.
Welltower also experienced some rent collection issues in its senior housing triple net and medical outpatient facilities as some operators struggled with the pandemic's financial impact on their operations. However, rent collection improved by the fourth quarter to 97% and 98%, respectively, for those two segments. Meanwhile, it collected 99% of the previously deferred rent due in the fourth quarter.
The pandemic continued to have a lingering impact on the company's senior housing investments in the first quarter of 2021. NOI in its operating portfolio was down 44% in the quarter due to continued occupancy declines. Meanwhile, it fell 2% in its triple net portfolio as the rental collection rate slipped to 96% in the period.
Welltower made significant changes to its portfolio in 2020. The REIT completed $1.6 billion of new investments, including $910 million of acquisitions and funding $528 million of development projects. It helped finance those new investments by selling $3.7 billion of assets.
The company continued to actively manage its portfolio in 2021. It completed $368 million of investments in the first quarter, including $209 million of acquisitions. Meanwhile, it sold $216 million of properties in the period.
Notable transactions over the past year include the substantial exit of its operating relationship with Genesis Healthcare and the recapitalization of HC-One. Welltower will sell 51 Genesis-linked assets for $880 million in value, giving it funds to redeploy into better opportunities. One of those is the participation in an investor group-led recapitalization of HC-One, a senior housing operating platform in the U.K. The company will provide a $750 million senior loan and a $76 million equity investment. The funds supplied by Welltower and others will enable HC-One to invest in and redevelop its portfolio of care homes.
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Welltower's senior housing-focused investment approach hasn't been a winning strategy in recent years: