Jonathan Litt hedshot
Land & Buildings Investment Management LLC Founder & CIO Jonathan Litt (Photo courtesy of Land & Buildings)

Activist shareholder Land & Buildings accused real estate investment trust Ventas of “long-term underperformance” and announced its own nominations to the board of directors in an open letter to shareholders on Monday.

In the letter signed by Stamford, CT-based Land & Buildings’ founder and Chief Investment Officer Jonathan Litt, the registered investment manager nominated Litt to the Ventas board, saying that the Chicago-based REIT needs a shareholder representative “who is fully aligned with shareholders and who will bring the objectivity and appropriate experience required to instill accountability and demand improved performance.” 

Land & Buildings also planned to nominate Michelle Applebaum to the board, but decided to only move forward with Litt’s nomination. Ventas is the second largest owner of senior living properties in the United States, according to the 2021 ASHA 50 list compiled by the American Seniors Housing Association.


The shareholder said that Litt would “help fix the issues that have caused the company’s performance to decline” and would work to “return Ventas to its industry leader status.”

In a news release, Ventas countered that since 1999, the REIT has delivered compound annual total shareholder returns of almost 20%. Land & Buildings, however, said Ventas’ performance has “meaningfully fallen behind” its peers over the past decade. 

“This inferior earnings growth has, in our view, largely been the result of Ventas’ underwhelming capital allocation decisions and lagging senior housing operating portfolio [net operating income] growth, which has subsequently driven the poor [total shareholder return] underperformance that has frustrated investors for far too long,” the letter states. 

Ventas countered that year-to-date, through March 4, it has delivered total shareholder returns of 9.5%, “significantly outperforming both industry peers and other benchmarks and indices.” The REIT also pointed to recent corporate strategy and capital allocation priorities, including investments in independent living, development of a third-party institutional capital management business, and expansion of its medical office building and life sciences businesses.

Litt said that Land & Buildings has “tremendous respect — both personally and professionally — for the individuals on the Board and for the Chairman and CEO of Ventas.”

“Over the years, few companies and few leaders in our industry have built as strong a reputation as Ventas and Debra Cafaro,” he wrote in the letter. “That is why it is particularly disappointing that for quite some time, from a shareholder perspective, the reality has not matched the narrative.”

Land & Buildings cited “self-inflicted communications and capital allocation missteps” in losing credibility with the investment community, including the sale of a 45% interest in its life sciences development pipeline and the failure of senior housing operator Eclipse Senior Living.

In a business presentation prepared for a Monday presentation at the Citi 2022 Global Property CEO Conference, Ventas said that elevated labor, utility and operating expenses continued into the first quarter of 2022. But the REIT expects senior housing to continue its path to recovery.

Board appointments

The letter indicated that Ventas had rebuffed a request to appoint Litt to the board and accused the REIT of engaging in “misleading settlement negotiations” and falling “deeply out of touch with shareholders.”

In a statement, Ventas acknowledged that it had held several discussions over the past several months with Land & Buildings, instead choosing to appoint to its board Michael J. Embler, former chief investment officer of Franklin Mutual Advisors. Ventas said the Board Nominating and Corporate Governance Committee interviewed candidates and determined that Litt and Applebaum “do not meet the standards established by the board for new directors.”

“In addition to multiple recent conversations between Land & Buildings and Ventas, as well as between their respective advisors, in late February, Ventas’ CEO directly called Mr. Litt to reinforce the company’s commitment to operational excellence and performance, and its willingness to continue discussions with him in order to benefit from any ideas or suggestions for the benefit of shareholders,” Ventas stated. “Given this engagement, we are disappointed that Land & Buildings has chosen to pursue a distracting and unnecessary proxy fight because the company would not nominate Mr. Litt to serve on its board.”

Ventas said its board is divserve and brings “strong oversight and relevant experience” focused on advancing the best interests of all shareholders. Shareholders will vote on board recommendations at the REIT’s 2022 annual meeting, which has not yet been scheduled.

Land & Buildings history

Land & Buildings issued a similar letter in 2019 to Brookdale Senior Living shareholders, calling it “a referendum on the company’s historical underperformance” as well as several decisions made by board members. Land & Buildings in 2016 and 2018 as well as in 2019 had called for Brookdale to sell assets or separate its real estate and management company into two separate companies to maximize the value of the company’s real estate. Brookdale rejected the approach.

Land & Buildings also proposed nominations to the Brookdale board, but ultimately, Litt withdrew his candidacy as well as the candidacy of an additional person that Land & Buildings had put forth.

Litt also was a vocal critic of the 2016 proposed merger of NorthStar Asset Management Group with private equity firm Colony Capital and commercial real estate company NorthStar Realty Finance.