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Although a “robust senior housing recovery is well underway,” Ventas Chair and CEO Debra Cafaro said during Friday’s third-quarter earnings call that it may not progress in a straight line.

The pandemic created a tight labor market, resulting in labor cost pressures that accelerated in September, she said. Looking ahead, Cafaro said she expects to see “meaningful” revenue increases in 2022 and improving pricing power. 

If economists’ forecasts that labor force participation will increase, and comments from public health officials that the end of the pandemic is in sight thanks to vaccines and new treatments hold true, “it is a momentous day for all of us,” she said.

“The U.S. is in the midst of an impressive economic recovery that, together with demographic demand for our asset classes, gives us confidence and optimism in our future,” Cafaro said. “We believe the more widespread administration of vaccines and new efficacious treatments for COVID-19 will benefit both the broader economic recovery and our company.”


The investment pipeline for the Chicago-based real estate investment trust is “busy,” Cafaro said, adding that Ventas is evaluating $40 billion worth of opportunities. The company reviewed more deals this year than in all of 2019, she said. 

In September, Ventas completed its acquisition of New Senior Investment Group in an all-stock transaction valued at $2.3 billion.

In October, Ventas announced its intention to transition operations of 90 senior living communities adversely affected by the pandemic to eight other operators. The communities were operated by Eclipse Senior Living. To date, 65 communities have moved, according to J. Justin Hutchens, executive vice president, senior housing.

As of Nov. 3, Ventas has binding agreements to sell $170 million of senior housing and medical office assets expected to close by year end. 

“We are committed to expanding our senior living, life science and medical office footprints through relationship-driven investments that enhance our portfolio and drive returns,” Cafaro said, adding that the company is “excited for the future of Ventas and expect a robust recovery in senior housing.”

The REIT’s current investment priorities are focused on expanding its portfolio of higher-margin independent living properties in the United States and Canada, as well as increasing its presence in life science and in research and innovation, as well as selectively expanding its presence in the area of medical office buildings.


Occupancy in the senior living portfolio increased for eight consecutive months through October, demonstrating the “powerful demand” for senior living, Cafaro said. Leads and move-ins continued to be higher than in pre-pandemic times in October, at 109% and 104%, respectively, she said.

“I’m encouraged that year-over-year occupancy turned positive for the first time since the onset of the pandemic,” Cafaro said. “A robust senior housing recovery is well underway.”

In the third quarter, average occupancy grew by 230 basis points (2.3%) over the second quarter, to 82.2%, led by the U.S. portfolio with growth of 290 basis points, and 110 basis points in Canada, which is more than 93% occupied, according to Hutchens. October leads and move-ins continue to perform above pre-pandemic levels, and move-outs remain relatively stable.

Same store revenue in the third quarter increased by $13.6 million (3.1%), driven by strong occupancy growth and slight rate growth. Hutches said that U.S. operators have proposed an 8% rate increase.

Operating expenses increased by $167 million (5.4%), over half of which is due to overtime and agency costs. Despite the higher costs, Hutchens said, operators are seeing increasing hiring trends and are actively addressing labor challenges through centralized recruitment of in-line staff, applicant tracking systems, flexible scheduling and other workplace changes, to remain competitive.

Average occupancy for the fourth quarter in same-store senior housing operating portfolio is expected to increase 80 to 120 basis points sequentially, reflecting continued demand exceeding pre-pandemic levels. Revenue also is expected to grow in the quarter as a result of occupancy increase.