Ventas, Inc. · NYSE:VTR
Ventas — 2024 Nareit REITweek
54 slides from Ventas's conference presentation, June 2024
Slide 1: 2024 Nareit REITweek
2024 Nareit REITweek June 4 - 5
Slide 2: Non-GAAP Financial Measures & Cautionary Statements
Non-GAAP Financial Measures & Cautionary Statements Non-GAAP Financial Measures This presentation includes certain financial performance measures not defined by generally accepted accounting principles in the United States (“GAAP”), such as Nareit FFO, Normalized FFO, Net Operating Income (“NOI”), S
Slide 3: Table of Contents
Table of Contents 04 June Business Update 32 Driving Strong Execution and Cash 07 Ventas’s Strategy Flow Generation Throughout the Portfolio 13 Delivering Profitable Organic Growth in Senior Housing 37 Financial Strength & Flexibility 27 External Growth Opportunities Focused 40 First Quarter 2024 on
Slide 4: June Business Update
June Business Update
Slide 5: June Business Update
1 DELIVERING PROFITABLE ORGANIC GROWTH IN SENIOR HOUSING ▪ Continued multiyear senior housing NOI growth, led by occupancy and rate growth ▪ Estimated May QTD SHOP same-store average occupancy growth of 300+bp year-over-year, led by the U.S. growing at 360+bp o Broad-based demand strength across com
Slide 6: SHOP Same-Store Occupancy Update
STRONG GROWTH IN SHOP SAME-STORE AVERAGE OCCUPANCY CONTINUES ESTIMATED MAY QTD 1 Estimated May QTD average occupancy growth of 300+bp to begin key selling season, led by the U.S. at 360+bp (AL: ~400bp / IL: ~320bp) SHOP Same-Store Occupancy Update 300+bp +240bp +170bp +120bp 1. The Company’s guidanc
Slide 7: Ventas's Strategy
Ventas’s Strategy
Slide 8: Ventas is a Leader in Real Estate
Ventas is a Leader in Real Estate Focused on serving a large and growing ~1,350 $34B +18% $1.80 aging population with an PROPERTIES1 ENTERPRISE VALUE2 ANNUALIZED TSR SINCE 20002 ANNUALIZED DIVIDEND PER emphasis on senior housing Including: Compared to: SHARE ~800 +12% Nareit HC REIT Index2 Senior Ho
Slide 9: Positioned to Create Value
Positioned to Create Value Leader in senior housing in North America Data-driven insights influencing with high-quality portfolio serving large asset performance, execution and and growing aging population market selection Attractive valuation and growth profile Strong operator relationships Deeply
Slide 10: We Are Executing a Focused Strategy to Drive Growth
We Are Executing a Focused Strategy to Drive Growth… 1. 2. 3. Deliver profitable Capture value-creating Drive strong execution organic growth in external growth focused and cash flow generation senior housing on senior housing throughout portfolio 10
Slide 11: …and Enhance Total Shareholder Returns
…and Enhance Total Shareholder Returns Drive enterprise NOI and normalized FFO per share growth Further enhance portfolio quality and operator diversification Increase SHOP scale Enable strong returns on capital Drive stable and growing dividend capacity 11
Slide 12: Ventas Has the Right Platform to Win
Ventas Has the Right Platform to Operating Focus & Capabilities Data-Driven Insights Through Win to Drive Value Creation Ventas OITM Ventas has the expertise, knowledge and relationships necessary to capture the unprecedented organic growth opportunity COMPETITIVE and capitalize on highly actionable
Slide 13: Delivering Profitable Organic Growth in Senior Housing
/1 Delivering Profitable Organic Growth in Senior Housing
Slide 14: Ventas's Senior Housing Operating Portfolio
FY24 Guidance as of 2/14/241 FY24 Guidance as of 5/1/241 Ventas’s Senior Housing Operating 10% - 15% 12% - 16% Portfolio SAME-STORE CASH NOI GROWTH SAME-STORE CASH NOI GROWTH $118M $130M Top owner of real estate in the large and fragmented U.S. senior housing market TOTAL PROJECTED SHOP GAAP TOTAL P
Slide 15: Senior Housing Growth Opportunity Exemplified by Record Occupied Units
Senior Housing Growth Opportunity Exemplified by Record Occupied Units1 U.S. Senior Housing Occupied Units Highest On Record (NIC)1 ACCELERATING DEMOGRAPHIC DEMAND FOR SENIOR HOUSING 950K 900K ▪ U.S. 80+ population anticipated to grow 850K by 24%+ through 2029 800K 750K ▪ Leading edge of U.S. Baby B
Slide 16: U.S. Senior Housing Demand Driven Occupancy Opportunity
POISED TO CAPITALIZE ON SENIOR HOUSING GROWTH OPPORTUNITY WITH ACCELERATING DEMAND U.S. 80+ Population1 Occupancy potential opportunity to surpass prior peak U.S. Senior 20M Housing Demand Next 5 Years Driven Occupancy +24% Growth Opportunity 15M 5 Years Post Financial Crisis Senior Housing Occupanc
Slide 17: Multiyear SHOP NOI Growth Opportunity
Multiyear SHOP NOI Growth Opportunity
Slide 18: Multiyear SHOP NOI Growth Opportunity
OCCUPANCY OPPORTUNITY 1,2 91%+ Multiyear SHOP 88% NOI Growth 83% VTR U.S. SHOP communities at ~80% occupancy are in Opportunity 77% markets that support potential net absorption of ~1,000bp upside over the next few years 1Q21 1Q24 Pre-COVID ILLUSTRATIVE NEAR-TERM SHOP NOI GROWTH OPPORTUNITY 1,2 KEY
Slide 19: Lowest Construction Starts in Over a Decade
Lowest Construction Starts in Over a Decade, Supporting Expected Multiyear Net Absorption LIMITED NEW SUPPLY VTR U.S. SHOP COMMUNITIES ARE IN MARKETS THAT SUPPORT POTENTIAL NET ABSORPTION OF ~1,000bp OVER THE NEXT FEW YEARS4 ▪ Low new supply combined with accelerating 80+ population growth expected
Slide 20: Ventas OI
Ventas OITM
Slide 21: Ventas Operational Insights Platform
Ventas Operational InsightsTM RIGHT Platform MARKETS Proprietary data analytics and experiential insights platform drives portfolio actions and optimizes the right combination of markets, assets and operators Nearly 1 billion data points, ~60% operational, provide opportunity for unmatched portfolio
Slide 22: Driving Performance With Ventas OI
Driving Performance With Ventas OITM VENTAS OITM 1 2 3 4 5 6 PLAYBOOK Identify Opportunity Right Operator Aligned Management Portfolio Actions NOI-Generating Value Creation DRIVES POSITIVE Agreement Capex OUTCOMES Price / Volume Optimization Operator Transitions Completed NOI-Generating Capex Invest
Slide 23: NOI-Generating Capex Investment Results
Ventas Operational InsightsTM NOI-Generating Capex Investment Results Improved market position creating occupancy opportunity 104 470bp Sunrise Senior Living Discovery Senior Living SEASONED PROJECTS COMPLETED 1Q24 YOY AVERAGE OCCUPANCY PRIOR TO 9/30/23 GROWTH 9%+ 119% 1Q24 YOY STREET RATE GROWTH 1Q
Slide 24: Completed NOI-Generating Capex Investments
VENTAS OITM DRIVEN MARKET SELECTION OF NOI-GENERATING CAPEX INVESTMENTS Completed NOI- Generating Capex Investments in Anticipation of Net Absorption Opportunity > Completed 208 projects in attractive markets through advanced Ventas OITM driven market selection > VTR well-positioned to capitalize on
Slide 25: U.S. SHOP Portfolio Has Favorable Key Quality Characteristics
U.S. SHOP Portfolio Has Favorable Key Quality Characteristics Median Household Income Median Home Value Median 75+ Net Worth $85,178 $86,923 $477,803 $473,955 $375,833 $374,200 VTR VTR VTR 1Q24 U.S. Same-Store RevPOR 80+ % Total Population 80+ Population Growth 4.4% 4.1% 17.3% 17.3% $5,905 $5,979 VT
Slide 26: Expanding SHOP Operator Footprint with Proven High Performing Operators
Expanding SHOP Operator Footprint with Proven High Performing Operators Total SHOP Operators 24 OPERATOR SELECTION CRITERIA 10 Strong product-type acumen SHOP operators with market expertise and experience in the full spectrum of senior housing Strong leadership service offerings 2020 June 2024 Fina
Slide 27: External Growth Opportunities Focused on Senior Housing
/2 External Growth Opportunities Focused on Senior Housing
Slide 28: Investment Pipeline of Senior Housing Communities
ACTIVELY EXECUTING ON SENIOR HOUSING INVESTMENTS Investment Pipeline of Senior INVESTMENT STRATEGY ALIGNS WITH VENTAS’S FINANCIALLY ATTRACTIVE TIME TO INVEST Housing STRENGTHS Communities Submarkets with supply / demand profile, Year 1 FFO per share neutral / accretive with strong affordability and
Slide 29: Senior Housing Investments Aligned to Investment Priorities
Senior Housing Investments Aligned to Investment Priorities RECENT INVESTMENT ACTIVITY ~$350M RIGHT MARKETS RIGHT ASSETS RIGHT OPERATORSTM Closed senior housing investments Average 3-year Attractive investment basis $241k per unit submarket net New, aligned management ▪ Original FY guidance ab
Slide 30: Senior Housing Investments Closed Year-to-Date
MC IL MC 25% 25% 27% MC AL 51% 49% Senior Housing AL 73% Investments Closed AL, 50% Year-to-Date Mount Bachelor | $55M (Bend, OR) Magnolia Springs | $143M (Multiple Locations) Orchard Grove | $36M (Shrewsbury, MA) Mattison Crossing $46M (Freehold, NJ) TPC Parkway $49M (San Antonio, TX) MC 28% MC 16%
Slide 31: Opportunity to Invest in Senior Housing
Opportunity to Invest in Capital markets dislocation is increasing the number of assets with challenged capital structures, Senior Housing making this the right time for Ventas to pursue value-creating external growth opportunities RIGHT MARKETS RIGHT ASSETS RIGHT OPERATORSTM RIGHT TIME Entering the
Slide 32: Driving Strong Execution and Cash Flow Generation Throughout the Portfolio
Driving Strong Execution and /3 Cash Flow Generation Throughout the Portfolio
Slide 33: An Essential Role in the Longevity Economy
An Essential Role in the The aging of America’s 70 million baby boomers drives unprecedented demand for outpatient visits and healthcare R&D. Ventas Outpatient Medical & Research Longevity Economy properties are at the center of these growing portions of the economy 65+ Population Growth Projections
Slide 34: Outpatient Medical Portfolio Delivers Strong Results
AFFILIATED WITH LEADING HEALTH SYSTEMS WITH HIGHLY FIRST QUARTER HIGHLIGHTS SPECIALIZED USES 81% SF of new and renewal deals Outpatient Medical Portfolio Delivers 94% Strong Credit Investment Grade 900K executed in the quarter, +50% YoY Complementary, Affiliated Compounding with Health System or Gro
Slide 35: Outpatient Medical Equitized Loan Portfolio Delivering Strong Results
ON MAY 1, 2023 VENTAS TOOK OWNERSHIP OF >3M SF PORTFOLIO DRIVING CHANGE VIA HIGHLY SUCCESSFUL LILLIBRIDGE PLAYBOOK Outpatient Medical Equitized Loan >60% 100% 50% Portfolio Delivering Strong Results Buildings Service Leasing agents migrated to contracts upgraded / Lillibridge, consolidated replaced
Slide 36: Outpatient Medical and Research Assets Aligned Through Institutional Demand
Outpatient Medical and Research Assets Aligned Through Institutional Demand RESEARCH PORTFOLIO OUTPATIENT MEDICAL PORTFOLIO >17 ~71% ~14,000 >35 million top-tier research credit tenancy patient visits annually providers universities Cutting edge research to advance treatments Supporting nation's lea
Slide 37: Financial Strength & Flexibility
Financial Strength & Flexibility
Slide 38: Financial Strength and Flexibility is Foundational to Executing on Our Strategy
PROVEN ACCESS TO DIVERSE SOURCES OF CAPITAL $8.8B Capital raised Financial Strength (2023 – 2024 YTD)1 and Flexibility is ▪ Bank market Foundational to ▪ US & CAD bond market Executing on Our ▪ Secured debt Strategy ▪ Convertible bond market ▪ Common equity ▪ Capital recycling YTD 2024 CAPITAL RAISI
Slide 39: Leverage Improvement Trajectory
LEVERAGE IMPROVEMENT TRAJECTORY Clear and visible path to continued leverage improvement Drivers of Key Balance Sheet, Net Debt / Further Adjusted EBITDA1 Leverage Improvement Recent Progress Leverage & $2.7B $70M of sequential annualized SHOP Liquidity Metrics Revolver Revolver Capacity SHOP Organi
Slide 40: First Quarter 2024 Results & 2024 Outlook
First Quarter 2024 Results & 2024 Outlook
Slide 41: First Quarter 2024 Financial Performance and 2024 Outlook
FIRST QUARTER 2024 FINANCIAL PERFORMANCE & KEY HIGHLIGHTS 2024 OUTLOOK 2 ▪ First Quarter 2024 Normalized FFO per share of $0.78, an increase of over As of 2/14/24 As of 5/1/24 5% YoY and led by organic property growth Net Income Attributable to $0.00 – $0.11 $0.03 – $0.11 Common Stockholders First Q
Slide 42: Appendix
Appendix
Slide 43: 2024 Guidance As of May 1, 2024
Net Income and FFO Attributable to Common Stockholders2 NOI2 2024 Guidance As of May 1, 20241 FY 2024 FY 2024 - Per Share FY 2024 Low High Low High Low High Dollars in millions USD, except per share amounts, totals may not sum Net income attributable to common stockholders $11 $45 $0.03 $0.11 NOI $2
Slide 44: 2024 Guidance: Year-Over-Year Same-Store Cash NOI by Segment
For the Year Ended December 31, 2024 SHOP OM&R Triple-Net Non-Segment Total High End Net income attributable to common stockholders $ 45 2024 Guidance: Depreciation and amortization5 1,216 Interest expense, G&A, other income and expenses 6 807 Year-Over-Year NOI $ 855 $ 585 $ 606 $ 22 2,068 Same-Sto
Slide 45: Non-GAAP Financial Measures Reconciliation: Adjusted EBITDA
For the Three Months Ended March 31, 2024 December 31, 2023 Net loss attributable to common stockholders $ (14,312) $ (90,819) Non-GAAP Adjustments: Financial Measures Interest expense 149,933 154,853 Loss on extinguishment of debt, net 252 85 Reconciliation Taxes (including tax amounts in general,
Slide 46: Net Income to NOI – Trailing 5 Quarters Reconciliation
For the Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 Net income (loss) attributable to common stockholders $ 17,517 $ 103,453 $ (71,124) $ (90,819) $ (14,312) Net Income to NOI – Adjustments: Trailing 5 Quarters Interest and other income (1,743)
Slide 47: Senior Housing Operating Portfolio Same-Store Cash NOI Reconciliations
Senior Housing Trailing 5-Quarters 1Q23 2Q23 3Q23 4Q23 1Q24 Operating Portfolio Total revenues $ 704,993 $ 724,614 $ 754,417 $ 775,195 $ 813,304 Same-Store Cash Adjustments: Operating Revenue Revenues not included in cash operating revenues1 (17,496) (15,720) (16,582) (16,989) (15,499) Revenue impac
Slide 48: Outpatient Medical and Research Portfolio Same-Store Cash NOI Reconciliations
Outpatient Medical 1Q23 2Q23 Trailing 5-Quarters 3Q23 4Q23 1Q24 and Research Total revenues $ 203,632 $ 216,366 $ 226,988 $ 222,722 $ 219,508 Portfolio Adjustments: Same-Store Cash Straight-lining of rental income Non-cash rental income (2,345) (2,573) (1,958) (2,177) (2,350) (2,484) (2,989) (2,144)
Slide 49: First Quarter 2024 Same-Store Cash NOI by Segment
Non-GAAP For the Three Months Ended March 31, 2024 For the Three Months Ended March 31, 2023 Financial Measures SHOP OM&R Triple-Net Non-Segment Total SHOP OM&R Triple-Net Non-Segment Total NOI $ 203,483 $ 145,570 $ 151,630 $ 3,201 $ 503,884 $ 167,771 $ 136,719 $ 145,943 $ 15,432 $ 465,865 Reconcili
Slide 50: 2024 Guidance Same-Store Cash NOI by Segment Reconciliation
For the Year Ended December 31, 2024 SHOP OM&R Triple-Net Non-Segment Total High End Net income attributable to common stockholders $ 45 Non-GAAP Financial Depreciation and amortization5 1,216 Interest expense, G&A, other income and expenses 6 807 Measures NOI $ 855 $ 585 $ 606 $ 22 2,068 Reconcilia
Slide 51: FFO and FAD Reconciliation
For the Three Months Ended March 31, Q1 YoY Change 2024 2023 ’24-’23 Net (loss) income attributable to common stockholders $ (14,312) $ 17,517 n/a Net (loss) income attributable to common stockholders per share1 $ (0.04) $ 0.04 n/a Adjustments: FFO and FAD Depreciation and amortization on real estat
Slide 52: Outpatient Medical and Research Same-Store Cash NOI – Trailing 8
2 Q2 2 3 Q2 2 4 Q2 2 1 Q2 3 2 Q2 3 3 Q2 3 4 Q2 3 1 Q2 4 2 Q2 2 2 Q2 1 3 Q2 2 3 Q2 1 4 Q2 2 4 Q2 1 1 Q2 3 1 Q2 2 2 Q2 3 2 Q2 2 3 Q2 3 3 Q2 2 4 Q2 3 4 Q2 2 1 Q2 4 1 Q2 3 Outpatient NOI $ 1 3 6 ,5 8 3 $ 1 3 7 ,3 2 0 $ 1 3 5 ,3 1 6 $ 1 3 7 ,6 2 2 $ 1 3 6 ,7 3 1 $ 1 3 3 ,7 0 4 $ 1 3 6 ,7 1 9 $ 1 3 7 ,9 7
Slide 53: 2024 Guidance As of Feb. 14, 2024
Net Income and FFO Attributable to Common Stockholders2 NOI2 2024 Guidance As of Feb. 14, 20241 FY 2024 FY 2024 - Per Share FY 2024 Low High Low High Low High Dollars in millions USD, except per share amounts, totals may not sum Net income attributable to common stockholders $0 $47 $0.00 $0.11 NOI $
Slide 54: 2024 Guidance: Year-Over-Year Same-Store Cash NOI by Segment
For the Year Ended December 31, 2024 SHOP OM&R Triple-Net Non-Segment Total High End Net income attributable to common stockholders $ 47 2024 Guidance: Depreciation and amortization4 1,212 Interest expense, G&A, other income and expenses 5 806 Year-Over-Year NOI $ 847 $ 586 $ 606 $ 26 2,065 Same-Sto