Chicago-based Ventas suffered significant impact from the COVID-19 pandemic in the second quarter, though an increase in move-ins later in the quarter and into July indicate the real estate investment trust may be on the road to recovery. The REIT reported its second-quarter earnings results Friday.
“Our second-quarter results demonstrate the significant benefit of Ventas’s diversified portfolio,” said Debra A. Cafaro, Ventas chairman and CEO. The firm achieved strong performance in its office and triple-net lease segments, which partially offset the unprecedented impact of the COVID-19 pandemic on its senior housing operating portfolio.
Cafaro noted that the firm took “decisive actions” to keep Ventas stable financially through mutually beneficial agreements with Brookdale Senior Living and Holiday Retirement, as well as by making adjustments to its corporate cost structure and reducing its second-quarter dividends. These and other actions will help the firm “weather the initial impact of the pandemic,” Cafaro said.
Net income for the quarter revealed a loss of 42 cents per share, compared with a gain of 58 cents in the prior-year quarter. The REIT recorded $260 million in non-cash items as a result of its evaluation of the value of certain of its assets and the go forward collectability of certain of its future rents as a result of the pandemic’s impact primarily on senior housing.
Financial analysts continue to keep an eye on Ventas and view it as a profitable REIT long-term, however.
“Ventas’ seniors-housing segment, which makes up 56% of its earnings, continues to be challenged in the near term due to an elevated level of new supply, which has lasted longer than we expected, and from cost pressures due to a labor shortage” Kyle Sanders, financial services analyst for Edward Jones told McKnight’s Senior Living. “These near-term negatives are offset by positive long-term demographic trends and an attractive dividend yield, in our view.”
For more on Ventas’ second-quarter earnings call, visit: Ventas, CareTrust REIT hope for COVID aid for senior living.