Ventas Expects $300M in Senior Housing Investments in First Half 2024

In its 2023 Q4 earnings report last week, Ventas didn’t meet expectations — a lost of $0.23 per share for the quarter rather than the $0.164 analysts projected, according to Business Insider. And the annual loss was $0.10 per share, higher than the expected $0.04.

But the company emphasized the way forward. “We expect unprecedented demand for senior housing in 2024 and subsequent years because of the rapidly growing senior population and the value our communities provide to residents and their families,” said Debra Cafaro, chairman and chief executive officer, in prepared remarks. “Accelerating demographic demand is driving advantaged growth from our portfolio. We are optimistic about the future and committed to delivering continued strong performance and value for shareholders while enabling exceptional environments that benefit the large and growing aging population.”

More specifically, “We’re already seeing our pipeline expand as high-quality senior housing communities in good markets with embedded growth come to market, and we have a line of sight to complete over $300 million of investments in the first half of this year,” Cafaro said during the earnings call.

“We are primarily expanding with existing partners with proven performance for Ventas, and plan to increase our footprint in the fast-growing IL, AL memory care combination communities,” J. Justin Hutchens, executive vice president of senior housing and chief investment officer, said during the call. “Our pipeline is growing, as we have several interesting potential investments in our sites.”

In response to an analyst question, Robert Probst, executive vice-president and chief financial officer, said, “As I mentioned earlier, look, the returns on these investments that we’re seeing make this attractive from day 1 to our shareholders in our view, even at the current cost of capital when you look at the numbers. And we started this discussion with investors really late last year at NAREIT where cap rates have changed. And I think the consensus view at that point continues to be that’s a good investment.”

Answering another analyst question, Hutchens went on to say that Ventas is focused on attaining 80% occupancy and returning to pre-pandemic cash flows. They’re looking to add $100 million per year to the senior housing operating portfolio, or SHOP. By the end of 2023, they had completed 167 projects that had started in October 2022. “We think there’s about another 70 that completes by this May for the key selling season and then another group of 82 or so, hopefully, by the beginning of next year’s key selling season,” he said. “So, we’re well past halfway done and like the opportunity to do more and increase our opportunity to be competitive.”