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Ventas CEO: We Have ‘Line of Sight’ on More Than $300M in Senior Housing Deals

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Ventas (NYSE: VTR) is gearing up for an active investment year ahead, with a “line of sight” on more than $300 million of senior housing deals this year, according to CEO Debra Cafaro.

Last year, the Chicago-based real estate investment trust (REIT) raised more than $4 billion amid what Cafaro called “the most favorable supply demand fundamentals the industry has ever experienced.”

Ventas reported a 2023 year-end liquidity position of $3.2 billion, with $800 million of debt maturing in 2024.

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Looking ahead to the rest of this year, the company’s top investment priorities are focused on NOI-generating CapEx “and our existing real estate and senior housing acquisitions,” said Executive Vice President of Senior Living Justin Hutchens.

“Sellers are motivated to transact, creating numerous actionable deals,” Hutchens said during the call with investors and analysts Thursday. “My team is actively working on transactions exceeding $300 million that meet our criteria, and I look forward to adding to that as the year progresses.”

The company built into its guidance an expectation of $350 million worth of acquisitions transacting in 2024, management added.

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Ventas’ stock price fell more than 3% by the time the markets closed Thursday, ending the day at $44.21 per share.

Average occupancy in the company’s senior housing operating portfolio (SHOP) grew by 1.7% in the fourth quarter of 2023, compared with the same period in 2022. The company noted that was a result of “favorable supply/demand conditions combined with the implementation of the Ventas OI active asset management playbook.”

“Momentum ramped at the end of 2023 with fourth quarter occupancy accelerating while strong pricing,” Hutchens said. “Higher move-ins fuel better than typical seasonal results, and helped 2024 to get off to a strong start.”

That helped push the portfolio’s net operating income (NOI) margins 15% higher in the quarter, Hutchens said.

In 2020, Ventas restructured its master lease with operator Brookdale (NYSE: BKD), pushing its loan maturities out to 2025. Now, the company is looking ahead to a new lease with Brookdale that starts in 2026 and has around 1,000 basis points of occupancy upside, according to Hutchens.

According to Hutchens, the priority will be to expand with its existing partners and “increase its footprint” in independent living, assisted living and memory care communities. Hutchens added there is also a focus on CapEx projects, with Ventas planning an additional 70 projects to be completed before May before the company’s “key selling season” starts in the third quarter of the year. Another 82 are planned to be completed by mid-2025.

“We’re well past halfway done and and like the opportunity to do more and increase our opportunity to be competitive,” he said.

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