Janus Living shares jump about 18% after US$840 million IPO

[NEW YORK] Janus Living, a seniors-focused real estate investment trust (Reit), jumped nearly 18 per cent in its trading debut on Friday (Mar 20) after the company raised US$840 million in an initial public offering (IPO).

The shares opened at US$23.50 each in New York, above its IPO price of US$20. The trading gives the US company a market value of roughly US$6 billion, based on the outstanding shares.

The Denver-based Reit sold 42 million shares for US$20 each, according to a statement on Thursday. Janus Living, carved out of Healthpeak Properties, ended up attracting demand for more than 10 times the deal’s size, with interest from long-only and Reit-focused investors, according to people familiar with the matter.

The offering, which began marketing on Monday, was increased from an initial 37 million shares; and by Wednesday, investors were urged to bid at the top end of the starting range of US$18 to US$20.

The company invests in healthcare-related real estate properties including senior housing, life sciences facilities, medical offices, hospitals and skilled nursing homes.

Favourable demographic trends underpinned the investment case for Janus Living as the ageing baby boomer generation increasingly seeks eldercare housing.

With occupancy of senior housing communities above pre-pandemic levels, rent growth is outpacing costs, while demand exceeds supply amid high construction costs and long-term interest rates.

That has led other larger Reits focused on senior housing, such as Welltower and Ventas, to outperform the broader market.

Yet, it is one of only a handful of US Reit IPOs in recent years, including SmartStop Self Storage Reit’s US$931.5 million IPO in April and data centre Reit Fermi’s US$784.9 million debut in October.

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Janus Living’s initial portfolio includes 34 senior housing communities in 10 states, with 69 per cent of units in Florida and Texas, split between life plan communities, known as continuing care retirement communities, and traditional rental senior housing.

Healthpeak expects to keep a more than 80 per cent stake in Janus Living following the offering. BLOOMBERG