Ventas reportedly in talks to buy all or part of Brookdale

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Healthcare real estate investment trust Ventas is in talks to purchase all or part of Brookdale Senior Living, the Wall Street Journal reported Thursday.

The media outlet reported Jan. 10 that Blackstone Group LP was interested in the company but now says that that interest seems to have waned.

Ventas already has a large stake in seniors housing: 760 of the 1,270 properties in its portfolio are seniors housing communities as of the fourth quarter of 2016, according to its website. Among those properties are 147 Brookdale communities, representing about 5% of the REIT's revenue, according to Ventas.

During a Feb. 10 conference call with analysts, one month after the initial report of Brookdale's rumored negotiations with Blackstone had been published, Ventas Chairwoman and CEO Debra Cafaro was asked what a Brookdale sale would mean to Ventas as a landlord.

“Brookdale ... is an important customer of Ventas, and they are an important industry participant, with 80,000 employees and 100,000 seniors that they care for every day,” she said. “We have a good relationship with them. We have excellent agreements between the companies. And we continue to try to work with Brookdale, as we do with all of our customers, to continue to enhance and improve our mutual businesses.”

On Monday, Brookdale announced its financial results for the fourth quarter of 2016 and the entire year, reporting revenue of $1.21 billion, down 2.4% year-over-year. The company reported a net loss of $268.6 million compared with a net loss of $174.3 million in the fourth quarter of 2015.

During a call with analysts the next day, Executive Chairman Daniel Decker briefly addressed rumors of a potential sale, saying: “Brookdale's board and management team regularly engage in a wide range of strategic opportunities to enhance shareholder value and … are in the process of exploring options and alternatives to create and enhance shareholder value.” He said he could not comment further.

Brookdale also was a topic when HCP Inc. held its earnings call Monday. The senior living operator currently is the REIT's largest tenant, representing more than one-fourth of its portfolio, executives said. But HCP is reducing the concentration of Brookdale assets in its portfolio.

“With steps we have taken, we have set in motion a substantial reduction in our exposure,” Michael Dale McKee, executive chairman of HCP's board, told analysts. “We've announced our intention to continue to reduce our concentration of Brookdale, and that remains a high priority in 2017.”

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