Welltower will exit its operating relationship with Genesis HealthCare as it sells 51 wholly-owned skilled-nursing facilities through a series of transactions that will deploy approximately $745 million of anticipated proceeds into new opportunities, the company has announced.

Welltower will sell 42 traditional skilled nursing facilities for $680 million to a joint venture in which it will retain a participating preferred equity position. Of those, 35 traditional skilled nursing facilities will be sold for approximately $500 million to a joint venture comprised of Welltower, Aurora Health Network, and Peace Capital. Welltower has entered into a forward sale agreement valued at $182 million for seven skilled nursing facilities it currently sub-leases to Genesis and for which Welltower owns a bargain purchase option that can be executed in April 2023. The Aurora Health Network joint venture is intended to close at the same time Welltower exercises its bargain purchase option, Welltower said in a statement. 

Welltower will also contribute its nine former PowerBack short-stay rehab facilities into an existing 80/20 joint venture with ProMedica, at a total value of $292 million.  To transition the assets, Welltower will pay Genesis an $86 million lease termination fee and will reduce Genesis' indebtedness to the company by $170 million once certain restructuring milestones are achieved. Welltower's equity ownership position in Genesis will also increase from 9% to 15%. After the debt reduction, Genesis will owe Welltower $167 million with a maturity date of January 1, 2024.