Welltower CEO: Health Systems Should ‘Lighten Up,’ Sell Real Estate

Health systems that still own all of their real estate should consider “lightening up” and selling it, according to Welltower (NYSE: HCN) CEO Tom DeRosa.

Faced with squeezed margins, health systems can take the capital they receive from the real estate sales and redeploy it into research, among other things, DeRosa explained during a presentation at the 35th Annual J.P. Morgan Healthcare Conference in San Francisco on Wednesday.

The Toledo, Ohio-based health care real estate investment trust (REIT) currently owns 1,464 health care properties in the United States, Canada and the UK. Approximately 17% and 17 million square feet of Welltower’s portfolio is made up of outpatient ambulatory care space.

Increasingly, health systems are beginning to recognize Welltower as a valuable partner, DeRosa said. That’s due, in part, to the company’s senior care platform.

In fact, within the next couple of weeks, Welltower is going to announce a multi-year corporate collaboration around the topic of aging with the Johns Hopkins Health System, DeRosa teased.

Welltower still sees opportunities to continue to deploy capital into ambulatory care space with major health systems, DeRosa said. About 96% of the medical office properties that Welltower currently owns are affiliated with “major” health systems, he added.

Written by Mary Kate Nelson