HEALTHCARE INFLUENCER: Ventas

Toward the end of the third quarter, Ventas announced that it had acquired an independent living seniors housing community located in downtown New York City’s Battery Park neighborhood for $194 million. This was not the REIT’s only acquisition for the quarter by any means, but this deal stood out because, as it said in its earnings report, “it establishes Ventas’ leadership in the high-end Manhattan market.” Other deals during the quarter: it purchased a $21 million medical office building fully leased to Ardent Health Services and located on-campus of an existing Ventas-owned Ardent hospital and it purchased four on-campus medical office buildings for $79 million from developer Pacific Medical Buildings with a fifth MOB currently under contract.

It also extended for a 10-year term its exclusive MOB development relationship with PMB—a move that suggests the healthcare REIT will be doubling down on MOB in the coming months.

All in all, the quarter was vintage Ventas with its activity a mix of headline-making news, bread-and-butter deals and what appears to be a stronger focus on the MOB asset class. Such diversity is what the market has come to expect from Ventas, one of the three top leading healthcare REITs. With a portfolio of approximately 1,200 seniors housing, healthcare and research properties in the United States, Canada and the United Kingdom, the REIT has been successfully riding several trends in the fragmented $1 trillion healthcare real estate market, including longevity, demographic trends and healthcare policy.

Ventas is helmed by longtime chairman and CEO Debra A. Cafaro. Among her notable accomplishments, Cafaro was recently named one of the Top 100 Best Performing CEOs in the World for the fifth consecutive year by Harvard Business Review, one of only three women on the 2018 list. Indeed, her track record at since joining Ventas in 1999 is impressive. During her tenure, she has expanded the healthcare REIT’s market capitalization to approximately $26 billion at its peak from $200 million at the beginning of her tenure, and delivered a compound annual total shareholder return of 22% since 2000.

As CEO, Cafaro has navigated Ventas through a what has been a changing regulatory and market environment for healthcare real estate in recent years. The company has, for instance, invested billions in acquisitions to bulk up on its private pay assets in response to changing policy trends. The REIT also made a key decision a few years ago to divest itself of its skilled nursing facilities with the 2016 spin off of these assets into Care Capital Properties. Another notable transaction—the sale of 36 skilled nursing facilities operated by Kindred Healthcare last year—was worth $700 million and Ventas used the proceeds to bolster what was already a strong financial position.