Ventas Partnership to Buy $1.8B Senior Housing Portfolio

CHICAGO—Ventas has signed a definitive agreement to acquire a Class A portfolio of 31 purpose-built senior housing communities and four in-progress developments in the Quebec market. The portfolio is valued at $1.8 billion including the construction in progress.

The REIT is investing in the portfolio through an 85/15 percent equity partnership with local senior housing developer and operator Le Groupe Maurice (LGM).

LGM will continue to manage and further develop the portfolio under the Le Groupe Maurice brand, while Ventas will have exclusive rights to fund and own all additional developments under a pipeline agreement with LGM. New incremental developments are expected to average two to three starts per year.

The deal also part of Ventas’ “pivot to growth,” in executing on external opportunities, according to the REIT’s Chairman and CEO Debra A. Cafaro. “The transaction enhances and diversifies our leading portfolio and underscores our successful strategy of partnering with best-in-class operators and developers,” she said in prepared remarks.

The transaction is also a diversification play for Ventas, offering the REIT greater exposure to Canada’s senior housing market, which is characterized by stable and growing cash flows, limited new supply and demand growth via an aging population—the Canadian 75 and over senior population is forecast to grow nearly 50% between 2018 and 2028. Quebec, in particular, has a penetration rate approximating 18%, which is two times the Canadian average.

Founded in 1998, LGM has grown from one property in 2000 to 35 communities, all through purpose-built development. It also has a 9% market share in Quebec.