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In a major shake-up of the senior housing investment sector, Welltower Inc. has struck a $900 million deal to acquire NorthStar Healthcare Income Inc., marking another bold move in its expansion strategy. The all-cash transaction, announced Wednesday, will see NorthStar shareholders receive $3.03 per share—outpacing the company's previously estimated net asset value of $2.96 per share.

Shareholder Approval and Strategic Implications

Pending shareholder approval and the outcome of a "go shop" period, the acquisition is expected to close in the first half of 2025. Welltower, a leading healthcare real estate investment trust (REIT), intends to allocate NorthStar’s senior housing portfolio to an entity linked to its newly launched funds management business.

"We expect that this portfolio will serve to further enhance our regional densification strategy through our existing geographic footprint and network of exceptional seniors housing operators," Welltower Chief Investment Officer Nikhil Chaudhri stated.

Welltower’s Growing Footprint

The acquisition follows an aggressive expansion strategy by Welltower, which invested heavily in senior living and healthcare real estate throughout 2024. In the third quarter alone, the company secured 20 age-restricted "active adult" properties for $691 million and completed $2.2 billion in acquisitions and loan funding, alongside $203 million in development funding.

NorthStar, meanwhile, has also been reshaping its portfolio. The senior housing REIT offloaded its stake in Trilogy REIT Holdings LLC to American Healthcare REIT Inc. for $254 million and finalized a $31.5 million sale of an independent living facility in Rochester, New York.

NorthStar Calls It a Win for Investors

NorthStar CEO Kendall Young hailed the deal as a major success for shareholders.

"We are pleased to have reached this agreement with Welltower, which is the culmination of these efforts and a great outcome for our stockholders, delivering a compelling, certain, cash value for their shares," Young said.

Morrison Foerster LLP is advising NorthStar on the deal. Counsel for Welltower was not immediately available Thursday.