Welltower has recapitalized a medical office portfolio through a $550 million joint venture with global alternative investment platform Wafra. Wafra now owns a 80% stake in the 24-asset portfolio, which is located in Texas, Florida, Minnesota, the Carolinas, Tennessee, California, Pennsylvania and Washington, among other states. The REIT is retaining a 20% interest in the portfolio, which is 97% affiliated with health systems. Welltower will also continue serving as asset manager and operator for the properties.   

Russell Valdez, Wafra's chief investment officer says the two companies may partner on other deals. "We look forward to expanding our footprint together in these growing sectors with the shared goal of further collaboration on healthcare and other real estate opportunities," he said in prepared remarks. 

There is a case to be made that medical office assets will flourish as the pandemic passes. Cushman & Wakefield argues that the same drivers that fueled medical offices before the pandemic—namely demographics—will continue to support the sector's growth. It also notes that healthcare spending is projected to increase by $1.9 trillion in the US alone between 2020 and 2027, per the Centers for Medicare and Medicaid Services.