Feb. 12--Toledo investment trust Welltower Inc., which last spring helped purchase and shore up bankrupt Toledo-based nursing home operator HCR ManorCare, on Tuesday said that its funds from operations last year slipped by nearly 3 percent.
Welltower, a real estate investment trust that buys and manages senior housing and medical-related properties, reported 2018 funds from operations of $1.51 billion, or $4.03 a share. That was down from $1.55 billion, or $4.21 a share, in 2017.
Fourth-quarter funds from operations were $382.8 million, or $1.01 a share, an increase of 0.6 percent from a year earlier when it was $380.3 million, or $1.02 a share. The fourth-quarter figure missed Wall Street expectations of $1.03 a share, according to Zacks Investment Research.
Funds from operations is usually the best way to evaluate a real estate investment trust's cash flows because unlike a manufacturing plant whose equipment and building depreciate, a REIT's assets usually appreciate because of property improvements or higher rent yields.
Welltower's net profits for 2018 were $758.3 million, or $2.02 a share, compared with $463.6 million, or $1.26 a share for 2017. Fourth-quarter profits were $101.8 million, or 27 cents a share, compared to a loss of $111.5 million, or 30 cents a share a year earlier.
Revenues in 2018 totaled $4.70 billion, up nearly 9 percent from $4.32 billion in 2017. Fourth-quarter revenues of $1.24 billion were up 12 percent from $1.10 billion a year earlier.
Welltower said it completed more than $4 billion worth of gross investments in 2018, including $3.4 billion in acquisitions and $290 million in development funding. Both moves yielded an investment return exceeding 7 percent.
During the fourth quarter Welltower finished disposing of 41 properties acquired from Quality Care Properties, which sold HCR ManorCare to Welltower and ProMedica health care system for $3.3 billion in July. Welltower said selling the 41 properties generated proceeds of $264 million with the company making a $37 million profit.
"2018 represented a significant turning point towards growth for Welltower as we completed more than $4 billion accretive investment, demonstrating the success of our differentiated strategy and ability to compete on capabilities to deploy capital at attractive returns and drive future cash flow growth," Tom DeRosa, Welltower CEO, said. "Furthermore, our commitment to sustainability, diversity and governance enhance our world-class platform that continues to deliver long-term value to shareholders."
On Tuesday, Welltower declared a cash dividend of 87 cents, payable Feb. 28 to shareholders of record as of Feb. 22.
On the New York Stock Exchange, shares of Welltower at 12:30 p.m. were 71 cents to $76.72 a share.
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