Ventas Chairman and CEO Debra Cafaro
Ventas Chairman and CEO Debra Cafaro

Ventas is “focused on serving a large and growing aging population with an emphasis on senior housing,” the Chicago-based real estate investment trust said Monday in a business update issued in conjunction with upcoming investor meetings.

According to the REIT, this is a “financially attractive” time to invest in senior housing, given the attractive accretive to net operating income growth, unlevered internal rates of return in the low-to-mid teen, and pricing below replacement costs.

In February, executives at Ventas said the company is actively working on an investment pipeline of more than $300 million. The investment plan, according to Monday’s update, is geared toward optimizing net operating income and normalized funds from operations per share growth, boosting operator diversification, increasing its senior housing operating portfolio (SHOP) scale, enabling strong returns on capital and “driving stable and growing dividend capacity.”

The REIT recently declared a quarterly dividend of $0.45 per common share. The dividend will be payable in cash on April 18, 2024 to stockholders of record as of the close of business on April 1.

With $18 billion of loans maturing through 2025 among senior housing properties, Ventas sees an opportunity to buy senior housing properties facing challenged capital structures.

“Some owners lack cash flow to cover loans at today’s rates and the equity required to properly recapitalize,” Ventas said. “Sellers [are] motivated to transact, creating numerous actionable opportunities.”

Ventas is looking to expand relationships with established operators within its existing SHOP, with plans to increase concentration in fast-growing independent living, assisted living and memory care combination communities.

Occupancy

SHOP average occupancy growth in fourth quarter 2023 accelerated to 170 basis points year over year compared to 110 basis points year over year in the third quarter 2023, and the REIT expects to see continued acceleration of average occupancy growth this year.

Ventas named Energy Star winner

In other news, Ventas has earned the Partner of the Year Sustained Excellence in Energy Management award from the EPA for two years in a row. In addition, the REIT won the Partner of the Year Award for the fourth consecutive year. More than 175 Ventas-owned buildings received Energy Star certification in 2023, the most certified properties of any healthcare REIT.