Ventas, Inc. · NYSE:VTR
Ventas — BofA Global Real Estate Conference 2024
41 slides from Ventas's conference presentation, Sep 10, 2024
Slide 1: BofA Global Real Estate Conference
BofA Global Real Estate Conference September 10, 2024
Slide 2: Non-GAAP Financial Measures & Cautionary Statements
Non-GAAP Financial Measures & Cautionary Statements Non-GAAP Financial Measures This presentation of Ventas, Inc. (the “Company,” “we,” “us,” “our” and similar terms) includes certain financial performance measures not defined by generally accepted accounting principles in the United States (“GAAP”)
Slide 3: Table of Contents
Table of Contents 04 September Business 21 Driving Strong Update Execution and Cash Flow Generation 07 Delivering Profitable Throughout The Organic Growth In Portfolio Senior Housing 26 Financial Strength & 17 External Growth Flexibility Opportunities Focused on Senior 28 Second Quarter 2024 Housing
Slide 4: September Business Update
4 September Business Update
Slide 5: Business Update: Reaffirming Full-Year 2024 Guidance
REAFFIRMING FULL-YEAR 2024 GUIDANCE 2 ▪ Key Assumptions3: As Presented 8/1/24 o Same-Store Cash NOI Growth Guidance Ranges (unchanged) Net Income Attributable to Common $0.07 – $0.13 • SHOP: 13.0% - 16.0% Stockholders Business Update1 Normalized FFO Per Share Guidance • Outpatient Medical & Research
Slide 6: SHOP Same-Store Occupancy Update
STRONG GROWTH IN SHOP SAME-STORE AVERAGE OCCUPANCY CONTINUES ESTIMATED AUGUST QTD 1 Strong August QTD SHOP estimated Same-Store average occupancy growth of 350bp YoY SHOP Same-Store Led by the U.S. growing YoY at 400bp (AL: 400bp / IL: 410bp) Occupancy Update +350bp +290bp ~280bp +170bp +120bp 1. Th
Slide 7: Delivering Profitable Organic Growth in Senior Housing
Delivering Profitable Organic Growth in Senior Housing (As Presented, August 1, 2024) 7
Slide 8: Senior Housing Operating Portfolio
Senior Housing Top owner of real estate in the large and fragmented U.S. senior housing market Operating Portfolio Positioned in markets with favorable demographics, strong net absorption and affordability (As Presented August 1, 2024) Positioned in product types with strong growth and margin profil
Slide 9: Occupancy Growth Driving SHOP Outperformance
Occupancy Growth Driving SHOP Outperformance and 8% Same-Store Revenue Growth in 2Q1 (As Presented August 1, 2024) SHOP SAME-STORE U.S. SHOP SAME-STORE CANADA SHOP SAME-STORE +380bp 13x 96.0% 2Q24 U.S. YoY Average Occupancy Growth YTD Net Move-Ins vs. PY (~900 net move-ins vs. PY at ~70) +400bp Cana
Slide 10: Strong SHOP Same-Store Performance in 2Q24, Led by U.S.
SHOP SAME-STORE CASH NOI KEY TAKEAWAYS ▪ Occupancy-led Same-Store Cash NOI growth of 15.2% YoY o 8 consecutive quarters of double-digit YoY Same-Store Cash NOI growth $189.6 Strong SHOP Same- 15.2% ▪ Strong occupancy growth driven by broad-based demand and strong Store Performance in $164.6 sales ex
Slide 11: Multiyear SHOP NOI Growth Opportunity
OCCUPANCY OPPORTUNITY 1,2 92%+ Multiyear SHOP NOI 88% Growth Opportunity 84% VTR U.S. SHOP communities at ~81% occupancy are in (As Presented August 78% markets that support 1, 2024) potential net absorption of ~1,000bp upside over the next few years 2Q21 2Q24 Pre-COVID ILLUSTRATIVE NEAR-TERM SHOP N
Slide 12: U.S. Senior Housing Demand-Driven Occupancy Opportunity
POISED TO CAPITALIZE ON EXPECTED SENIOR HOUSING GROWTH OPPORTUNITY WITH ACCELERATING DEMAND Opportunity to surpass prior U.S. 80+ Population2 occupancy peak U.S. Senior Housing 20M 5 Years Post Financial Crisis Next 5 Years Demand-Driven Occupancy +6% Growth +24% Growth Opportunity1 (As Presented Au
Slide 13: Lowest Construction Starts in Over a Decade
Lowest Construction Starts in Over a Decade, Supporting Expected Multiyear Net Absorption (As Presented August 1, 2024) 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 8
Slide 14: Ventas OI Platform
Ventas OITM Platform RIGHT (As Presented August 1, 2024) MARKETS Proprietary data analytics and experiential insights platform drives portfolio actions and optimizes the right combination of markets, assets and operators Combines in-house operating expertise with data analytics capabilities to drive
Slide 15: Ventas OI Platform Supporting Senior Housing Performance
Ventas OITM Platform Supporting Senior Housing Performance1 (As Presented August 1, 2024) MARKET ASSET OPERATOR Data-Driven Market Analysis NOI-Generating Capex Optimized Operator Mix 40+ ~1,000bp 215 350bp 160+ 25 Market-related data Potential net absorption in NOI-Generating Capex Outperformance i
Slide 16: Ventas OI Seasoned U.S. NOI-Generating Capex Investment Results
Ventas OITM 133 Seasoned U.S. NOI-Generating Capex Investment Results (As Presented August 1, 2024) Improved market position creating occupancy opportunity Sodalis Senior Living Sunrise Senior Living 530bp 6.5% 2Q24 YOY AVERAGE OCCUPANCY 2Q24 YOY REVPOR GROWTH GROWTH 350bp 109% OUTPERFORMANCE IN 2Q2
Slide 17: External Growth Opportunities Focused on Senior Housing
External Growth Opportunities 17 Focused on Senior Housing
Slide 18: Top Owner of U.S. Senior Housing Real Estate in a Large and Fragmented Market
5% Top Owner of U.S. Senior 8% REIT Peer Housing Real Estate in a Large 2% Publicly Traded Owner-Operator and Fragmented Market Opportunity To Expand SHOP 1.8M Units1 Footprint Through Value-Creating 85% U.S. Private-Pay Senior Housing External Growth Rest of Market 18 1. Company supplemental report
Slide 19: Investment Pipeline of Senior Housing Communities
ACTIVELY EXECUTING ON SENIOR HOUSING INVESTMENTS Investment Pipeline of Senior Housing Communities1 INVESTMENT STRATEGY ALIGNS WITH VENTAS FINANCIALLY ATTRACTIVE TIME TO INVEST STRENGTHS Submarkets with supply / demand profile, Year 1 FFO per share expected to be with strong affordability and meanin
Slide 20: ~$1 Billion Line of Sight in Expected Senior Housing Investments
~$1 Billion Line of Sight in Expected Senior Housing Investments MC MC 16% ~$400M Senior Housing 27% of Senior Housing Investments closed YTD Investments expected ~$1 Billion MC AL to close in 2024, year- 49% AL 51% 24% IL end weighted 60% ~$350M AL 73% at ~8% Going-In ▪ Similar financial profile to
Slide 21: Driving Strong Execution and Cash Flow Generation Throughout The Portfolio
Driving Strong Execution and Cash Flow 21 Generation Throughout The Portfolio
Slide 22: Update on Value Creation Activities Within Equitized Loan Portfolio
ELP OUTPATIENT MEDICAL OCCUPANCY GROWTH FUELED BY LILLIBRIDGE ACTIVE MANAGEMENT 91.4% Opportunity for continued Update on Value occupancy growth 81 3.0M Creation Activities 81.5% occupancy Within Equitized +450bp ELP Outpatient Medical Assets Portfolio square footage Loan Portfolio 77% initial $46M
Slide 23: Notable Developments During Second Quarter & Subsequent Events
KINDRED UPDATE FOR 23 LTACs ▪ Close to completion of transaction with Kindred Healthcare (“Kindred”) regarding 23 LTACs with lease expiration of April 30, 2025 and Q2 2024 annualized base rent ~$110 million (~5% NOI) o Potential ~(25% - 30%) annualized cash rent impact for 23 LTACs beginning May 1,
Slide 24: An Essential Role in the Longevity Economy
Growth in the 65+ Population3 An Essential Role in the Longevity Economy. 0.26 By the year 2030 65+ Population Share of Total The 65+ population now makes up about 18% of the U.S. population, an all- 0.24 1 in 5 U.S. Population time high that is continuing to rise as 11,200 baby boomers turn 65 ever
Slide 25: Outpatient Medical: Continued Strong Results
AFFILIATED WITH LEADING HEALTH SYSTEMS WITH HIGHLY SECOND QUARTER HIGHLIGHTS SPECIALIZED USES Outpatient Medical 83% 1.5M SF of new and renewal deals executed YTD, 20% year over year Strong Credit Portfolio Delivering Continued Strong 94% Investment Grade +30bp Affiliated Results with Health Sequent
Slide 26: Financial Strength & Flexibility
Financial Strength & Flexibility 26
Slide 27: Commitment to Financial Strength and Deleveraging
COMMITMENT TO FINANCIAL STRENGTH AND DELEVERAGING Organic SHOP growth and all equity funded senior housing investments driving meaningful leverage improvements YTD Net Debt to Further Adjusted EBITDA Leverage improvement driven by Commitment to Financial Strength Balance Sheet and 6.9x 0.5x $90M+ BB
Slide 28: Second Quarter 2024 Results
Second Quarter 2024 Results (As Presented August 1, 2024) 28
Slide 29: Second Quarter 2024 Financial Performance and Improved 2024 Guidance
SECOND QUARTER 2024 FINANCIAL PERFORMANCE & HIGHLIGHTS IMPROVED 2024 GUIDANCE ▪ Second Quarter 2024 Normalized FFO per share of $0.80, an increase of As of 5/1/24 As of 8/1/24 approximately 7% YoY and led by organic growth in senior housing Net Income Attributable to Total Company YoY Same-Store Cas
Slide 30: Appendix
Appendix (As Presented August 1, 2024) 30
Slide 31: 2024 Guidance as of August 1, 2024
Net Income and FFO Attributable to Common Stockholders2 NOI2 2024 Guidance as of August 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 $31 $56 $0.07 $0.13 NOI
Slide 32: Non-GAAP Reconciliation 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 $ 56 Non-GAAP Financial Depreciation and amortization5 1,275 Interest expense, G&A, other income and expenses 6 742 Measures Reconciliation NOI $ 867 $ 584 $ 599 $ 23 2
Slide 33: Non-GAAP Financial Measures Reconciliation: Adjusted EBITDA
For the Three Months Ended June 30, 2024 March 31, 2024 Net income (loss) attributable to common stockholders $ 19,387 $ (14,312) Adjustments: Non-GAAP Interest expense Loss on extinguishment of debt, net 149,259 420 149,933 252 Financial Measures Taxes (including tax amounts in general, administrat
Slide 34: Net Income to NOI – Trailing 5 Quarters Reconciliation
For the Three Months Ended June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Net income (loss) attributable to common stockholders $ 103,453 $ (71,124) $ (90,819) $ (14,312) $ 19,387 Net Income to NOI – Adjustments: Trailing 5 Quarters Interest and other income (1,032)
Slide 35: Senior Housing Operating Portfolio Same-Store Cash NOI Reconciliations
Senior Housing Trailing 5-Quarter Comparison 2Q23 3Q23 4Q23 1Q24 2Q24 Operating Portfolio Total revenues $ 724,614 $ 754,417 $ 775,195 $ 813,304 $ 817,600 Same-Store Cash Adjustments: Revenues not included in cash operating revenues1 (16,073) (16,562) (16,989) (15,499) (7,060) Operating Revenue Reve
Slide 36: Outpatient Medical and Research Portfolio Reconciliations
Trailing 5-Quarter Comparison Outpatient Medical 2Q23 3Q23 4Q23 1Q24 2Q24 and Research Total revenues $ 216,366 $ 226,988 $ 222,722 $ 219,508 $ 219,559 Portfolio Adjustments: Straight-lining of rental income (1,958) (2,350) (2,989) (3,290) (3,482) Same-Store Cash Non-cash rental income (2,177) (2,48
Slide 37: Second Quarter 2024 Same-Store Cash NOI by Segment
Non-GAAP For the Three Months Ended June 30, 2024 For the Three Months Ended June 30, 2023 SHOP OM&R Triple-Net Non-Segment Total SHOP OM&R Triple-Net Non-Segment Total Financial Measures NOI $ 214,241 $ 146,273 $ 150,428 $ 3,412 $ 514,354 $ 177,504 $ 144,195 $ 150,818 $ 8,555 $ 481,072 Reconciliati
Slide 38: FFO and FAD Reconciliation
For the Three Months Ended Q2 YoY For the Six Months Ended FY YoY June 30, Change June 30, Change 2024 2023 ’24-’23 2024 2023 ’24-’23 Net income attributable to common stockholders $ 19,387 $ 103,453 (81%) $ 5,075 $120,970 (96%) Net income attributable to common stockholders per share 1 $ 0.05 $ 0.2
Slide 39: Outpatient Medical and Research Same-Store Cash NOI – Trailing 9 Quarters
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 4 Outpatient Medical 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 2 Q2 4 2 Q2 3 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
Slide 40: 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 41: 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