Shares of Brookdale Senior Living rose after the company agreed to acquire 30 currently leased communities from Welltower for $290 million.
The stock gained 9.5% to $11.08 in after-hours trading on Tuesday. Shares closed down 1.2% at $10.12 and have shed 6.2% this year.
Contingent on the acquisition, Brookdale will also extend a separate, 39-community lease with Welltower by four years to 2036. That lease will be Brookdale's only remaining lease with Welltower following the acquisition.
The acquisition covers the real estate for 30 senior living communities currently leased and operated by Brookdale. The portfolio spans 1,152 assisted living and memory care units in 13 states.
The deal, expected to close during the fourth quarter, should reduce Brookdale's cash rent payments in 2027 by around $17.8 million. Brookdale's lease was set to mature in 2032.
Brookdale also said it had completed its previously announced acquisition of 735 units across 17 communities for about $157 million. That acquisition will eliminate about $11 million of cash rent next year.
The deals are expected to be accretive to cash flow and adjusted earnings before interest, taxes, depreciation, and amortization, Chief Executive Nick Stengle said.
"The completed acquisition of 17 communities and the agreement to acquire 30 communities from Welltower together represent another significant step forward in our strategy to own more of the real estate we currently operate," Stengle said. "Ownership allows Brookdale to capture the full benefit of future operating growth, while reducing our long-term lease obligations."
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