Ventas (VTR) Bank of America 2024 Global Real Estate Conference summary

Strategic Priorities and Performance

• Senior housing operating (SHOP) portfolio achieved its third year of double-digit NOI growth, with 2Q24 same-store cash NOI up 15.2% YoY and revenue up 8%, driven by occupancy gains and favorable supply-demand dynamics.

• Reaffirmed 2024 guidance: Normalized FFO per share of $3.12–$3.18, net income of $0.07–$0.13 per share, and total company same-store cash NOI growth of 6.5–8.0%.

• Targeting $1 billion in near-term senior housing investments, with $750 million expected to close in 2024 and an incremental $250 million identified, focusing on 7%-8% immediate returns and low- to mid-double-digit unlevered IRRs.

• Ongoing portfolio optimization and balance sheet strengthening, including a recent 10-year bond issuance at 5% and improved Net Debt to Further Adjusted EBITDA to 6.4x.

• Delivering strong total shareholder returns and maintaining a focus on performance improvement.

Data Analytics and Operational Platform

• The Ventas OI platform integrates operating experience with advanced data analytics to drive asset management, market selection, and operator performance.

• Over 160 SHOP operator transitions, 100+ acquisitions, 100+ dispositions, and 200+ asset refreshes executed since 2020, prioritizing markets and assets with the best absorption and return potential.

• SHOP portfolio outperformed NIC top 99 markets by 200 basis points in occupancy; refreshed communities saw 530 basis points occupancy growth and 6.5% RevPOR growth.

• NOI-generating capex and operator optimization driving occupancy and revenue outperformance.

• Next phase includes automating market analysis and price optimization using AI and predictive analytics.

Margin Expansion and Labor Environment

• Margin expansion is a key opportunity, with incremental margins of 50% between 80%-90% occupancy and 70% from 90%-100%, driven by operating leverage.

• Reduction in agency labor spend has improved margins; future focus is on driving occupancy and rate for further gains.

• Labor markets are the most favorable in five years, providing cost stability and supporting normal wage growth going forward.

• A softer macro labor environment is seen as advantageous due to the inelastic, demographically driven demand for senior housing.