Ventas, Inc. · NYSE:VTR
Ventas — Citi Global Property CEO Conference 2022
44 slides from Ventas's conference presentation, Mar 7, 2022
Slide 1: Citi Global Property CEO Conference March 7-8, 2022
Citi Global Property CEO Conference March 7 - 8, 2022
Slide 2: Non-GAAP Financial Measures & Cautionary Statements
2 Non-GAAP Financial Measures & Cautionary Statements Certain of the information contained herein, including intra-quarter operating information and number of confirmed cases of COVID-19, has been provided by our operators and we have not verified this information through an independent investigatio
Slide 3: Table of Contents
3 Table of Contents Portfolio Overview & Capital Allocation 4 Environmental, Social & Governance 11 Recent Senior Housing Highlights 14 Senior Housing Portfolio Actions Update 21 Office Business Update 30 Loan Portfolio Update 41 Capital Structure Actions 43
Slide 4: Portfolio Overview & Capital Allocation
Portfolio Overview & Capital Allocation
Slide 5: Sustainable Value Creation: Growth & Success Over Two Decades
5 Sustainable Value Creation: Growth & Success Over Two Decades Restructure & Survival Grow & Diversify Progress Through Downturn Re-Enter Growth & Diversification Portfolio Reshaping & Elevation COVID-19 Post COVID-19 • Successfully Navigated Bankruptcy of Sole Tenant • 4 strategic M&A deals • New
Slide 6: Case Study: Ventas Success in Life Sciences
6 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2015 2016 2017 2018 2019 2020 2021 Total Life Science Sq. Ft. (in thousands) Case Study: Ventas Success in Life Sciences 1030 Mass SSF Portfolio Establish Ventas Fund Enter Life Science Sector with Well- Positioned Partner + Portfolio
Slide 7: Case Study: Expanding Canadian Senior Housing Footprint with Le Groupe Maurice
7 Case Study: Expanding Differentiated Canadian Senior Housing Footprint with Le Groupe Maurice (LGM) Differentiated LGM Business Model Strong Development Track Record .. Successful track record of development, with average preleasing exceeding 60% due to unique brand and business model .. Leased up
Slide 8: Case Study: New Senior Independent Living Portfolio
8 Case Study: New Senior Independent Living Portfolio Portfolio Overview 103 Communities 12,400+ Units 36 States $2.3B Transaction 100% Private Pay Higher margin, independent living communities with favorable market characteristics, relatively low labor requirements and a three-year average length o
Slide 9: Case Study: Expanded Opportunities Via Ventas Investment Management
9 ~$1.6B ~$4.5B 1Q20 4Q21 Case Study: Expanded Opportunities Via Ventas Investment Management (VIM) Strategic Rationale Ventas Investment Management (VIM) provides Ventas and its shareholders numerous strategic benefits including: .. Further diversifying Ventas’s capital sources .. Augmenting Ventas
Slide 10: Current Capital Allocation Priorities and Track Record of External Investment
10 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ~$1B $1.4B $3.7B Current Capital Allocation Priorities >$3B Annual Average 2011-2021 Strong Track Record of External Investment Historical Acquisition Volume Experienced investments team, broad relationships
Slide 11: Environmental, Social & Governance
Environmental, Social & Governance
Slide 12: Sustainability Leadership Raises Our Returns
12 Sustainability Leadership Raises Our Returns Recent Accolades: Ventas Continues to be Recognized as an ESG Industry Leader Nareit’s 2021 Diversity, Equity and Inclusion Awards: Silver Award Winner Selected to 2020 Dow Jones Sustainability World Index for 3rd consecutive year Earned the most ENERG
Slide 13: Case Study: MOB Sustainability Cost Savings Initiatives
13 Case Study: MOB Sustainability Cost Savings Initiatives Projects support Ventas’s commitment to sustainability $24M INVESTMENT Includes amounts approved, not yet deployed 130+ ASSETS IDENTIFIED FOR UPGRADES Building Automation Systems (BAS), HVAC Optimization, and/or LED Retrofits Energy Greenhou
Slide 14: Recent Senior Housing Highlights
Recent Senior Housing Highlights
Slide 15: Senior Housing Trends
15 Clinical Trends February Leads1 1Q22 Quarter-to-Date SHOP Occupancy1 1Q22 In-Place Rate Increases1 1Q22 Operating Expenses 1Q22 HHS Grants Senior Housing Trends Rapidly improving clinical conditions ~15,300 (February) Continuation of elevated lead volumes and 113% vs. 2019 +420 bps (February QTD)
Slide 16: Rapid Improvement in Clinical Conditions – SHOP Clinical Update
16 Rapid Improvement in Clinical Conditions – SHOP Clinical Update1 (As of 02/25) Key Commentary Reductions in Confirmed New COVID-19 Cases since January VTR U.S. & Canada SHOP Confirmed New Resident & Employee COVID-19 Cases1 1. Reflects case data for all SHOP total owned assets, including assets H
Slide 17: SHOP Leading Indicator Trends
17 Jan21 Feb21 Mar21 Apr21 May21 Jun21 Jul21 Aug21 Sep21 Oct21 Nov21 Dec21 Jan22 Feb22 Leads 11,251 11,893 14,187 13,727 13,975 14,729 15,719 15,571 14,748 14,563 13,838 12,906 16,417 15,284 Move-Ins 955 1,032 1,414 1,475 1,539 1,597 1,578 1,496 1,420 1,367 1,306 1,342 1,095 1,292 Move-Outs 1,456 1,
Slide 18: Preliminary SHOP Average Occupancy Trends
18 Preliminary SHOP Average Occupancy Trends1 .. Feb-22 QTD average monthly occupancy +420bps vs. 1Q21 quarterly average, significantly outperforming historical trends driven by the ongoing senior housing sector recovery o U.S. – Record Level Demand: Feb-22 QTD average monthly occupancy +570bps vs.
Slide 19: Senior Housing Operating Expense Trends & Initiatives
19 Senior Housing Operating Expense Trends & Initiatives4 4Q21 SS SHOP Operating Results Composition 4Q21 SS SHOP Labor Trends Labor Initiatives Centralizing recruitment efforts Improving applicant tracking Strengthening recruiting resources Enhance oversight at focus communities Revenue Composition
Slide 20: Senior Housing Triple-Net Update and Key Actions
20 Senior Housing Triple-Net Update and Key Actions .. Since the onset of the pandemic, Ventas has proactively addressed ~90% of its pre-COVID-19 Senior Housing Triple-Net Annualized Adjusted NOI through transitions, asset sales and lease resolutions .. Lease resolutions with the remaining ~10% of S
Slide 21: Senior Housing Portfolio Actions Update
Senior Housing Portfolio Actions Update
Slide 22: Compelling Industry Supply and Demand Trends
22 14% 86% 2Q19 25% 75% 4Q21 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 3Q21 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 5M 7M 9M 11M 13M 15M 17M 19M 21M Compelling Industry Supply
Slide 23: Expected Senior Housing Recovery
23 $156M $90M $82M 4Q19 4Q20 4Q21 30.2% 19.7% 17.8% 4Q19 4Q20 4Q21 Expected Senior Housing Recovery5 Reflects 4Q21 stable pool of 353 asset comparable to 4Q19 Sizable NOI Margin Opportunity1 Opportunity to Return to Previous NOI Level1 Reflects 4Q21 stable pool of 353 asset comparable to 4Q19 $296M
Slide 24: Strongly Positioned Portfolio Supported by Advantaged SHOP Assets
24 Strongly Positioned Portfolio Supported by Advantaged SHOP Assets1 1. Reflects 4Q21 supplemental reporting owned asset scope; 2. High barrier markets primarily reflect top coastal markets and Canada; 3. Reflects U.S. scope only; 4. Reflects median value for U.S. scope only; 5. Based on 4Q21 annua
Slide 25: What is Ventas OI?
25 What is Ventas OI? Ventas Operational Insights (“Ventas OI”) is the data and operational analytics active asset management platform formally launched in 2022. This dedicated, focused platform supports our collaboration with managers in pursuit of our strategy of the right assets, with the right o
Slide 26: Recent Portfolio Actions Position Senior Housing for Value Creation
26 Recent Portfolio Actions Position Senior Housing for Value Creation1 Resolutions & Transitions Acquisitions & Developments Dispositions • Executed lease resolutions supporting mutually beneficial financial and operating terms • Transitioned various portfolios to new operators / management structu
Slide 27: Notable SHOP Capital Recycling Activity and Portfolio Actions
27 Notable SHOP Capital Recycling Activity and Portfolio Actions1 Resolutions & Transitions Acquisitions & Developments Dispositions Brookdale Lease Resolution ~$235M up-front consideration for VTR replacing over 2.5 years of cash rent reduction Mutually beneficial arrangement provides near-term fle
Slide 28: Expanding Independent Living Footprint
28 32% 51% 17% 2Q19 59% 32% 9% 4Q21 Expanding Independent Living Footprint1 SHOP Unit Mix by Acuity Type2 2Q19 (Pro Forma) 4Q21 ~32K Units ~62K Units IL AL MC +27% IL unit mix shift by adding over 25K IL units in high quality portfolios across the U.S. and Canada ~65% in U.S and 35% in Canada Expect
Slide 29: Growing Ventas's Independent Living Footprint in Canada with LGM
29 .. Montreal, QC .. 336 Units .. >6% projected stable cash yield Construction Start: Dec 2020 Expected Opening: 2023 Cost: $112M Growing Ventas’s Independent Living Footprint in Canada with LGM LGM - Cornelius LGM - LIZ .. Montreal, QC .. 291 Units .. >6% projected stable cash yield Construction S
Slide 30: Office Business Update
Office Business Update
Slide 31: Operational Excellence Driving Outperformance in Medical Office
31 .. Focused on driving outperformance through robust evaluation and operational excellence: o Leasing and retention o Customer Relationship Management (CRM) & tenant service o Expense control o Strategic reinvestment Operational Excellence Driving Outperformance in Medical Office Successful Leasin
Slide 32: Disciplined Expansion of Our MOB Footprint
32 Disciplined Expansion of Our MOB Footprint Expanding Relationship with Ardent Health Services Buyout of PMB’s Interest in Sutter Van Ness MOB .. In September 2021, Ventas, in connection with its long-standing partner Pacific Medical Buildings (“PMB”), completed a buyout of PMB’s interest in the s
Slide 33: Ventas Has a Leading National Medical Office Platform
33 Ventas Has a Leading National Medical Office (MOB) Platform MOB Platform is Focused in Advantaged Locations with Strong Credit Tenants 72% On-Campus 96% Affiliated with Health System or Hospital Ventas Has Favorable Tenant Specialty Mix 14% 86% Primary Care Specialty .. Several benefits of high s
Slide 34: Hospital + Health System Affiliations
34 Hospital + Health System Affiliations ~160 Ann. Adj. NOI (22% VTR) $374M States 31 Outpatient Sq. Ft. 18M MOBs 311 CT GA F L UT ID NC WA OR MT AZ CO NM ND SD NE KS OK TX MN IA MO WI KY MS NY PA M E AR VT NH NJ MA RI DE MD DC CA NV VA WV OH IN IL LA AL FL ME MI TN NC SC ID WY Reliable Growing Cash
Slide 35: Ventas's Life Science, R&I Portfolio
35 Ventas’s Life Science, R&I Portfolio Ventas now owns or has investments in a 10M sq. ft. Life Science, R&I portfolio, including developments underway: .. Residing on the campuses of >17 top-tier research universities collectively ranking in the top 5% of all NIH funding and conducting over 10% of
Slide 36: Ventas Life Science, R&I Operational Update
36 Ventas Life Science, R&I Operational Update Excellent Tenant Credit % of Total Annualized Base Rent Tenant Credit Yale University 8% AAA University of Pennsylvania 7% AA+ Wake Forest University 7% AA Brown University 4% AA+ Remaining Tenants 74% 100% Growing Life Science Funding Expected to Furth
Slide 37: Life Science, R&I Projects Recently Delivered & Under Construction
37 .. >70% leased or under LOI including to ASU .. ~7.7% projected stable cash yield .. Developed in a JV with GIC 227K SF Construction Start: Dec 2018 Open: 4Q20 Cost: $87M ($385 PSF) .. 70% preleased to University of Pittsburgh and UPMC .. ~7% projected stable cash yield .. Developed in a JV with
Slide 38: University of Pittsburgh: The Assembly
38 University of Pittsburgh: The Assembly The Assembly, Phase I | Pittsburgh, PA Expanding the Life Science, R&I Portfolio with the Assembly in Pittsburgh, PA .. Ventas delivered the Assembly in February 2022 .. Anchored by the world-renowned University of Pittsburgh in collaboration with University
Slide 39: Life Science, R&I Development Project with UC Davis
39 Life Science, R&I Development Project with UC Davis: First of $1B Near-Term Pipeline .. Ventas committed to a Life Science, R&I development project anchored by the University of California, Davis, a premier research institution ranked in the top 5% of universities for both NIH funding and R&D spe
Slide 40: Approximately $1B Life Science, R&I Development Opportunities
40 Approximately $1B Attractive Life Science, R&I Development Opportunities with Leading Research Universities ACTIVE POTENTIAL OPPORTUNITY #1 ACTIVE POTENTIAL OPPORTUNITY #2 Relationship New Existing Market + Relationship Major research university Major health system & university collaboration Prin
Slide 41: Loan Portfolio Update
Loan Portfolio Update
Slide 42: Improving Predictability, Increasing Real Estate-Generated NOI
42 Improving Predictability, Increasing Real Estate-Generated NOI: Well-Structured High-Rate Cash-Pay Notes Fully Repaid Loan Book Transformation .. 2021 loan repayments included several well-structured cash-pay loans generating $350 million at an unlevered IRR >11% .. Notable Repayments of Cash Pay
Slide 43: Capital Structure Actions
Capital Structure Actions
Slide 44: Capital Structure Actions; Expanded Disclosure Ensured Financial Strength
44 Capital Structure Actions; Expanded Disclosure Ensured Financial Strength & Flexibility .. In 2021, Ventas enhanced its portfolio and strengthened its balance sheet through $1.2B in asset dispositions and loan repayments o Non-core senior housing and MOB asset sales generated $850M of proceeds at