Welltower to Build 2nd Seniors Housing Facility in Manhattan

Shutterstock photo

Welltower Inc.WELL recently announced that it has partnered with developer company Hines for building the team's second project - a luxury senior living facility - at the Upper West Side of Manhattan.

Notably, the companies have acquired a development site at 2330 Broadway, at the corner of 85 th  Street, for $61 million. The venture plans to demolish the existing on-site commercial structures to build a top-class 17-story senior living and memory care community, spanning 140,000 square feet of space.

Both companies are optimistic on the wave of demand coming from seniors who want luxury homes in Manhattan and are also willing to pay a higher price for it. In fact, another senior living facility is in the works by the same partnership at 139 East 56 th  Street. The venture acquired a development site in 2016 to built a 130,000-square-foot facility. The 16-story property, Sunrise, is anticipated to open in early 2020.

Per Welltower management, the area is a strategic location for developing residential care communities with significant presence of wealthy seniors. Furthermore, with negligible supply of modern assisted-living communities in the area, the company can lever on this opportunity, as well as enjoy high occupancy at its properties.  

"We are proud to build on our partnership with Welltower to identify and secure excellent urban sites for the creation of extraordinary senior living communities," noted Tommy Craig, senior managing director of Hines.

Notably, the national healthcare expenditure is projected to increase in the coming years, with senior citizens incurring higher medical expenses as against the average population. Therefore, in the wake of retiring baby boomers, we expect Welltower to benefit from this trend. Additionally, such efforts to strengthen its senior housing portfolio in strategic location bode well.

Also, in the past six months, this Zacks Rank #3 (Hold) stock has rallied 25.2% compared with the industry 's 4.1% growth.

However, rising interest rate is a concern for Welltower as the company has substantial exposure to long-term leased assets. This also escalates the cost of financing acquisitions.

Stocks to Consider

A few better-ranked stocks from the REIT space are Iron Mountain Incorporated IRM , Boston Properties, Inc. BXP and Alexandria Real Estate Equities, Inc. ARE . All three stocks carry a Zacks Rank of 2 (Buy). You can see  the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Iron Mountain's funds from operations (FFO) per share estimates for 2018 remained unchanged at $2.13 in 30 days' time. The stock has gained 3% in a month's time.

Boston Properties' Zacks Consensus Estimate for 2018 FFO per share has been revised upward marginally to $6.38 in the last month. Its shares have rallied 7.2% over the past month.

Alexandria's Zacks Consensus Estimate for the current-year FFO per share remained unchanged at $6.61 in the last month. Its shares have climbed 2.8% in the past month.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Iron Mountain Incorporated (IRM): Free Stock Analysis Report

Boston Properties, Inc. (BXP): Free Stock Analysis Report

Alexandria Real Estate Equities, Inc. (ARE): Free Stock Analysis Report

Welltower Inc. (WELL): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: IRM , BXP , ARE , WELL

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?