Chicago-based Ventas slashed its quarterly dividend by 43% Friday, declaring a 45 cents per share second quarter dividend payable July 14. That’s down from the 79 cents per share payout a quarter earlier. The reduction came in response to the impact the COVID-19 pandemic is having on the real estate investment trust’s business, particularly seniors housing, and continued macro uncertainty.
The firm also reported that overall occupancy within its seniors housing portfolio has dropped to 80.7% as of June 11, down from 85.5% on April 2. Customer leads, however, have improved dramatically since April lows, according to the firm. Thanks to a partnership with a Mayo Clinic lab, Ventas also reports that its senior housing operators have been able to stay on top of testing, and as of June 12, 89% of its properties either never had a confirmed resident case or have not had a confirmed resident case in 14 days.
“As a result of COVID-19, our seniors housing portfolio occupancy continues to decline, and costs are higher, the combination of which is having a material effect on our financial results,” said Debra A. Cafaro, Ventas chairman and CEO. “Ventas continues to benefit from its diverse portfolio … and we remain well-positioned to manage through current conditions and build on our long track record of shareholder value creation.”
Based on improved capital market conditions and further clarity on second quarter expectations, the firm said it intends to repay $2.3 billion in borrowings under its $3 billion revolving credit facility by June 30, retaining approximately $1 billion in cash on hand. Following the repayment, the company will have $3.3 billion in available liquidity and no commercial paper outstanding.