Debra Cafaro headshot
Debra Cafaro

In looking back at 2020, Ventas Chairman and CEO Debra Cafaro called it a “grueling” year “dominated by the pandemic and punctuated by extreme weather disruptions,” but she said the company’s diversification strategy kept its enterprise “strong and stable.” 

With construction starts nationally down 50% year-over-year and deliveries at the lowest level since 2013, Justin Hutchens, executive vice president of senior housing, said the senior living industry outlook remains competitive.

The Chicago-based real estate investment trust’s senior housing operating portfolio market, in particular, Hutchens said, witnessed favorable supply trends, with starts down 66% versus the prior year and deliveries down 40%, leaving him “optimistic” about the long-term effects.

“Fewer starts today, combined with the compelling aging demographic trends for the 80-plus population expected to grow nearly 15% between now and 2024, which is five times faster than the broader population, will provide a potent tailwind over the next few years,” Hutchens said.


COVID-19 presented difficult clinical conditions, resulting in occupancy declining in the fourth quarter and into 2021. Operators have experienced elevated move-outs and limited tours and move-ins during the pandemic, Cafaro said.

Average occupancy declined by 90 basis points (0.9%) to 79.1% from the third quarter to the fourth quarter. Hutchens said the REIT’s operators have experienced “choppy waters” at this stage of the pandemic, and he expects a 250 basis point (2.5%) occupancy decline ahead due to continued elevated operating expenses. Recent severe winter weather, he added,  could mean additional expenses, as well as delays in move-ins.

Ventas reported a 2.9% revenue decline as a result of occupancy declines, along with heightened intentional discounting and incentives necessitated by the pandemic. Operating expenses increased approximately $3 million due to heightened COVID-19 activity and related testing and labor costs in the fourth quarter. 

But things are looking up. 

Ventas’ assisted living operators received $34 million in Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Funds in the fourth quarter and $13 million in the first quarter to offset COVID-19 expenses. Hutchens said that the U.S. Department of Health and Human Services continues to recognize the “crucial role” that senior living plays in protecting vulnerable adults.

First doses of the COVID vaccine have been administered at virtually all of its senior living communities, with almost 90% of them scheduled to receive second doses this month. Leads also were at their highest levels since the pandemic in January, showing the “strength of the value proposition of senior housing and demand for services,” he said.

Hutchens said 95% of the communities in Ventas’ portfolio already are open to move-ins, and 80% of the communities are operating in the least restrictive environments since lockdowns first occurred, offering a “more robust living experience” that includes more open dining, small group activities and fewer visitation restrictions.

“Leading indicators and demand are again showing strength, with leads in January at the highest level since the beginning of the pandemic,” Cafaro said. “Over the long term, resilient demand for senior housing and the strong value proposition senior housing offers to residents and their families, together with our high quality, diversified portfolio, position Ventas favorably to deliver value to our stakeholders.”


Ventas executives indicated that the REIT will continue to allocate capital to develop large, Class A independent living communities with Le Groupe Maurice in Quebec. The partnership, announced in June 2019, has expanded Ventas’ footprint in Quebec with the opening of nearly 800 new units in two communities in the fourth quarter. Cafaro said that the communities leased up quickly, and occupancy is already at almost 80%.

The senior living pipeline of potential acquisitions is active and growing, she said, adding that Ventas will continue to invest with an eye toward increasing reliable cash flow and favorable returns. 

Company news

In other news, Ventas expanded its board with the appointment of Maurice Smith, president and CEO of Health Care Service Corp. Smith has more than 25 years of experience in financial, strategic and operations leadership in the health insurance industry. 

Ventas also established a partnership with the Real Estate Executive Council’s Diversity Initiative as the founding diversity partner in healthcare real estate.

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