Ventas, Inc. · NYSE:VTR
Ventas — BofA Securities 2023 Global Real Estate Conference
43 slides from Ventas's conference presentation, Sep 12, 2023
Slide 1: BofA Securities 2023 Global Real Estate Conference
BofA Securities 2023 Global Real Estate Conference September 12, 2023
Slide 2: Non-GAAP Financial Measures & Cautionary Statements
Non-GAAP Financial Measures & Cautionary Statements Certain of the information contained herein, including certain operating and clinical information, such as patient and resident pricing and rate information, lead and move-in data and number of confirmed cases of COVID-19, has been provided by our
Slide 3: Table of Contents
Table of Contents Ventas Investment Thesis 5 Executive Summary & Recent Developments 7 SHOP Business Update 9 – 16 Equitized Loan Portfolio Update 18 – 19 Triple-Net Portfolio 21 Outpatient Medical & Research Portfolio 23 – 25 Financial Strength & Flexibility 27 – 28 Capital Allocation 30 Ventas Sus
Slide 4: Ventas Investment Thesis
Ventas Investment Thesis
Slide 5: Ventas Investment Thesis
Ventas Investment Thesis Healthcare Real Estate Is A Needs-Driven, Resilient Business That Has Generated Relative Outperformance In Disrupted Economic Cycles Portfolio Of High Quality, Diversified Leading S&P 500 REIT, Operating At Health Care Real Estate, Unified in Serving The Intersection Of Two
Slide 6: Executive Summary & Recent Developments
Executive Summary & Recent Developments
Slide 7: Executive Summary and Recent Developments
Executive Summary and Recent Developments As of 9/12/23 Re-affirming Full-Year 2023 Guidance1 ▪ On August 3, 2023, Ventas reported strong second quarter enterprise results, with Normalized FFO per share of $0.75 increasing 4% YoY and Total Company Same-Store Cash NOI growing 7% YoY, reflecting broad
Slide 8: SHOP Business Update
SHOP Business Update
Slide 9: SHOP Business Update
SHOP Business Update1 Broad-Based Demand Strength 3Q23 QTD ▪ Favorable demand/supply conditions driving broad-based senior housing demand, occupancy and NOI growth 3Q23 QTD, consistent with expectations ▪ Broad-based 3Q23 QTD occupancy gains in-line with same-store guidance of +100 bps of YoY averag
Slide 10: Update on Operator Transitions and Redevelopments
Update on 26 Operator Transitions and 12 Redevelopments Holiday by Atria Operator Transitions (26) Comprehensive Unit Upgrades (12) ▪ Operator transitions for 26 Holiday by Atria communities underway ▪ Comprehensive unit upgrade redevelopment projects currently underway at 12 communities (10 Holiday
Slide 11: Sunrise Senior Living Pricing & Sales Execution Driving Higher Move-Ins
Sunrise Senior Living Pricing & Sales Execution Driving Higher Move-Ins TM Right Market Right Asset Right Operator Recent Actions Driving Improved Performance Within 80 U.S. Communities + Executed Ventas OI™ with Sunrise revenue management to identify opportunities to calibrate street rates, yieldin
Slide 12: Completion of NOI-Generating CapEx Projects to Provide Incremental Growth
Completion of NOI-Generating CapEx Projects to Provide Incremental Growth TM Right Market Right Asset Right Operator Targeted NOI-Generating CapEx projects prioritized through Ventas OITM 170+ NOI-generating CapEx Projects Completing Through the End of 2023 ~174 ~155 Cumulative Completed Projects ~1
Slide 13: NOI-Generating CapEx: Examples of Completed Projects
TM NOI-Generating CapEx: Examples of Completed Projects Holiday by Atria Holiday by Atria Sunrise Sunrise 13
Slide 14: Successful Execution of Ventas OI Playbook: Case Study
Successful Execution of Ventas OITM Playbook Case Study: Transition 90 Aligned NOI- Identify Ventas OITM Right Portfolio Value Management Generating Opportunity Playbook Operator Actions Creation Agreements Capex National Operator Disaggregation Transition Completion: Jan 2022 Net MIMO Occupancy Rev
Slide 15: Unprecedented Organic Growth Opportunity
Unprecedented Organic Growth Opportunity U.S. 80+ Population Anticipated to Grow by 24%+ Through 2028 1 Incremental 80+ Population to Accelerate Through This Decade1 25M 5-Years Post Next 5 Years +906K p.a Financial 20M Crisis +24% growth 15M +525K p.a +7% growth 10M +215K p.a 5M M '12-'22 '23-'26 '
Slide 16: Senior Housing NOI Opportunity
Senior Housing NOI Opportunity Illustrative SHOP NOI Recovery Opportunity1 Incremental growth potential from favorable supply / demand trends could cause NOI to exceed pre-COVID levels 2Q23 Annualized Total Illustrative SHOP Total Portfolio SHOP Cash NOI2 at Cash NOI Recovery Annualized SHOP 81% Occ
Slide 17: Equitized Loan Portfolio Update
Equitized Loan Portfolio Update
Slide 18: Equitized Loan Portfolio Key Metrics & Increased Annualized NOI Guidance
Equitized Loan Portfolio Key Metrics & Increased Annualized NOI Guidance Equitized Loan Portfolio Valuation Increased Annualized NOI Guidance for Equitized Loan Portfolio ▪ Ventas’s cash investment basis is $1.50B comprised of its prior $486M ▪ Strong start in 2Q23 results in Annualized NOI guidance
Slide 19: Active Asset Management of Outpatient Medical Properties from Equitized Loan Portfolio
Active Asset Management of Outpatient Medical Properties from Equitized Loan Portfolio Outpatient Medical Portfolio Action Plan First 100 Days ▪ Completed strategic asset plans for each building to establish a roadmap for success ▪ Conducted building assessments (including elevator, electric, roof,
Slide 20: Triple-Net Portfolio
Triple-Net Portfolio
Slide 21: Update on 2025 Triple-Net Lease Maturities
Update on 2025 Triple-Net Lease Maturities Brookdale Senior Housing Portfolio Kindred LTAC Portfolio ▪ 120 senior living communities producing approximately 8% of annualized ▪ 29 long-term acute care hospitals (“LTACs”) producing approximately 7% of adjusted NOI in 2Q23 with lease maturity of Decemb
Slide 22: Outpatient Medical & Research Portfolio
Outpatient Medical & Research Portfolio
Slide 23: Outpatient Medical Operating Platform Delivers Consistent, Compounding Growth
Outpatient Medical Operating Platform Delivers Consistent, Compounding Growth Same-Store Occupancy Growth1 Same-Store Cash NOI Growth1 Eight Consecutive Quarters of YoY Same-Store Occupancy Growth Seven Out of Eight Quarters of >3% YoY Same-Store Cash NOI Growth 92.5% 92.3% 92.0% 92.0% 91.7% 91.8% 9
Slide 24: Excellent University-Based Research Portfolio Credit
Excellent University-Based Research Portfolio Credit1,2 High Quality Research Tenant Base Pharma / Biotech Tenants by Development Stage % Annualized Base Rent % Annualized Base Rent Science, Tech, Healthcare 5% Flexible Innovation Space 6% Other 9% Commercial - Pre-Commercial Other 20% Other IG or C
Slide 25: Top Tier University Partners with Leading NIH Funding
Top Tier University Partners with Leading NIH Funding Ventas partners with high credit universities with strong endowments that consistently receive NIH funding above the 90 th percentile Percentile of 2022 NIH Funding1 Ventas’s University Partners Pitt Wash U Duke UPenn >99th Johns Hopkins 100% Yal
Slide 26: Financial Strength & Flexibility
Financial Strength & Flexibility
Slide 27: Access to Diverse Sources of Capital
Access to Diverse Sources of Capital Capital Raising Activity Ventas continues to source attractively priced +$3.0B capital across multiple markets; year-to-date, $0.3B $2.7B line of sight Ventas has raised ~$2.7 billion at an advantaged ~4.8% cash rate Ventas is in a robust liquidity position with
Slide 28: Robust Liquidity & Access to Capital Helps Manage Rising Interest Rates
Robust Liquidity & Access to Capital Helps Manage Rising Interest Rates Liquidity & Maturity Profile Robust near-term liquidity of $3.3B and modest 2024 maturing debt Initial Maturities Credit Facility Capacity $2.75B $0.5B $2.7B2 As of YE22 Drawn Amount ($0.19B) $1.7B Ventas is in a Reported as of
Slide 29: Capital Allocation
Capital Allocation
Slide 30: Recent Capital Allocation Actions
Recent Capital Allocation Actions Outpatient Medical VIM Acquisition Senior Housing VIM Acquisition Dispositions ▪ ~$130 million high-quality outpatient medical ▪ ~$80 million of high-performing, recently ▪ In August, closed on ~$60 million of skilled property in Tucson, Arizona developed Class A se
Slide 31: Ventas Sustainability Update
Ventas Sustainability Update
Slide 32: Sustainable Practices Integrated Throughout our Business
Sustainable Practices Integrated Throughout our Business Ventas’s Sustainability Priorities Taking Action on Climate Change ~800 2040 property-specific decarbonization goal to achieve Net Zero operational carbon Executing on 2040 Net Zero operational roadmaps rolled out across operating emissions th
Slide 33: Appendix
Appendix
Slide 34: Non-GAAP Reconciliation: Adjusted EBITDA and Further Adjusted EBITDA
Non-GAAP Financial Measures Reconciliation Adjusted EBITDA and Further Adjusted EBITDA Dollars in thousands USD, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 March 31, 2023 Net income attributable to common stockholders $ 103,453 $ 17,517 Adjustments: Intere
Slide 35: Net Income to NOI – Trailing Quarters Reconciliation
Net Income to NOI – Trailing 5 Quarters Reconciliation Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Net (loss) income attributable to common s
Slide 36: SHOP Same-Store Cash Operating Revenue & Cash NOI Reconciliations
Senior Housing Operating Portfolio Same-Store Cash Operating Revenue & Same-Store Cash NOI Reconciliations Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited Trailing 5-Quarters 2Q22 3Q22 4Q22 1Q23 2Q23 Total revenues $ 658,056 $ 668,583 $ 674,126 $ 704,9
Slide 37: Outpatient Medical and Research Same-Store Reconciliations
Outpatient Medical and Research Portfolio Same-Store Cash Operating Revenue & Same-Store Cash NOI Reconciliations Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited Trailing 5-Quarters 2Q22 3Q22 4Q22 1Q23 2Q23 Total revenues $ 199,911 $ 201,414 $ 201,125
Slide 38: Second Quarter 2023 Sequential Same-Store Cash Operating Revenue by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Sequential Same-Store Cash Operating Revenue by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended March 31, 2023 SH
Slide 39: Second Quarter 2023 Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Same-Store Cash NOI by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended June 30, 2022 SHOP OM&R Triple-Net Non-Seg
Slide 40: Second Quarter 2023 Sequential Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation Second Quarter 2023 Sequential Same-Store Cash NOI by Segment Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Three Months Ended June 30, 2023 For the Three Months Ended March 31, 2023 SHOP OM&R Triple
Slide 41: 2023 Guidance: Year-Over-Year Same-Store Cash NOI by Segment
Non-GAAP Financial Measures Reconciliation 2023 Guidance: Year-Over-Year Same-Store Cash NOI by Segment1,2,3 Dollars in millions USD, unless otherwise noted, totals may not sum due to rounding, unaudited For the Year Ended December 31, 2023 SHOP OM&R Triple-Net Non-Segment Total High End Net income
Slide 42: FFO and FAD Reconciliation
FFO and FAD Reconciliation Dollars in thousands USD, except per share amounts, totals may not sum due to rounding, unaudited Q2 YoY 2022 2023 Change Q2 Q3 Q4 Q1 Q2 ’22-’23 YTD 2Q22 YTD 2Q23 Net (loss) income attributable to common stockholders $ (42,416) $ 1,256 $ (45,019) $ 17,517 $ 103,453 n/a $ (
Slide 43: Same-Store Cash NOI – Trailing 8 Quarters Reconciliation
Outpatient Medical and Research Same-Store Cash NOI – Trailing 8 Quarters Reconciliation Dollars in thousands USD, unless otherwise noted, totals may not sum due to rounding, unaudited 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q23 2Q22 1Q23 1Q22 4Q22 4Q21 3Q22 3Q21 2Q22 2Q21 1Q22 1Q21 4Q21 4Q20 3Q21
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