Ventas, Inc. earnings calls

competition and interest rates impact

Q (Nicholas Joseph · Citi): How has competition changed and how do interest rate moves affect competition for acquisitions?

A: Management said they screen deals closely and lean into relationship-driven advantages with repeat sellers and operators. They see competition, believe higher interest rates may slow private buyers, and said cap rates will settle over time.

"We have had a really active year and that is representative of our existing pipeline as well." — James Justin Hutchens

which properties at 95% occupied

Q (BofA): Which parts of the portfolio are at the 95% occupied level and how does that drive NOI and RevPAR?

A: Management said a large portion of the portfolio is in that 95% band and that those communities outperform the broader portfolio. They noted 15% of the portfolio is at or near 100% and that group shows outsized RevPAR growth.

"That group of communities has outsized RevPAR growth as well." — James Justin Hutchens

acquisition returns amid cap rate moves

Q (James Hall Kammert · Evercore): Can you estimate the RevPOR vs XPOR delta and can you still get low double-digit to mid-teens unlevered IRRs with cap rate moves and competition?

A: Management said RevPAR growth is driven by both rate and occupancy and they expect continued occupancy growth from an 89% U.S. base. They said they have achieved low double-digit to mid-teens unlevered IRRs over the last 3 years and remain confident in their underwriting despite cap rate movement and competition.

"For 3 years straight now of acquiring luxury senior housing, that has, you know, unlevered IRRs of low double digit to mid teens." — James Justin Hutchens

expense line drivers this quarter

Q (Wells Fargo): Why did margins slip sequentially despite higher occupancy and what should we watch on expenses over the next 12 months?

A: Management said incremental margin has been running in the low- to mid-50s versus 43% two years ago, showing operating leverage. They said the quarter had an extra day and higher utility costs which impacted margins but the multiyear operating leverage thesis remains intact.

"Our incremental margin has been running kind of low- to mid-50s." — James Justin Hutchens

follow-up on expense question

Q (Wells Fargo): Analyst followed up after a brief technical issue to continue the expense discussion.

A: No management answer occurred in this exchange; it was a continuation by the analyst after the technical issue.

Brookdale transition assets and rent drivers

Q (Austin Wurschmidt · KeyBanc): How are the Brookdale transition assets performing and when will they enter same-store? Also, are in-place or street rates driving recent RevPOR step changes?

A: Management said the non-same-store pool includes 234 communities and that like-for-like in that group is growing about 120 basis points, with the former Brookdale transitions performing on the better side. They added that in-house rent increases are the primary driver of RevPOR, with move-in rents also contributing, and they expect next year’s in-house increases to be around the same or better than this year.

"The primary driver of our RevPOR has been in house rent increases." — James Justin Hutchens

range of acquisition types and volumes

Q (Raymond James): What types of assets are you buying now (occupancy recovery vs value-add vs capex) and how much more volume could you do in each direction?

A: Management said this year about 70% of acquisitions were luxury local market leaders, 20% ultra-luxury, and 10% mid-market, describing luxury as highly amenitized, private-pay, high net worth communities. They said they are not buying value-oriented senior housing or turnkey development and that they want to do more of the same opportunities in their active pipeline.

"If we just look at this year, this year, we have had, you know, about 70% of our acquisitions have been luxury local market leaders." — James Justin Hutchens

disposition plans and recycling capital

Q (Ronald Kamdem · Morgan Stanley): Any update on monetizing non-senior housing assets or pruning the portfolio?

A: Management said they have about $700 million of disposals in guidance for the year and are continuing to opportunistically prune the portfolio to recycle capital into SHOP investments. They intend to continue that approach.

"We are continuing to opportunistically prune the portfolio and recycle capital into SHOP investments, and we intend to continue doing that." — Debra A. Cafaro (CEO·CHAIR)

AL vs IL performance differences

Q (Michael Mueller · JPMorgan): Is there a distinction between assisted living (AL) and independent living (IL) for acquisitions, RevPOR, or NOI growth?

A: Management said they have seen stronger occupancy growth in independent living and that the portfolio footprint is about half IL and the rest mostly AL with some memory care. They prefer a continuum of care on campus and see strong demand across product types and markets.

"we have seen stronger occupancy growth in our independent living portfolio." — James Justin Hutchens

Canada and UK opportunities

Q (UBS): Do you see JV opportunities in Canada and how do you view the UK opportunity?

A: Management said the U.S. is the main priority with most SHOP footprint and acquisitions; Canada has a high-performing portfolio but a less attractive growth profile so they have steered clear of expanding there. The U.K. is of interest but not a big priority.

"The U.S. has been our main priority." — James Justin Hutchens

future in-house rent increases and margins at high occupancy

Q (Julien Blouin · Goldman Sachs): Why might in-house rent increases be only similar next year, and do higher-occupancy parts of the portfolio show higher incremental margins near 70%?

A: Management said it is early to be definitive but they expect in-house increases next year to be around the same or better. They also said in the higher 90% occupancy range they are seeing around a 70% incremental margin and that in communities still growing occupancy the margin is even better.

"we know that even in that group, we are seeing around a 70% incremental margin." — James Justin Hutchens

company strategic priorities

Q (Juan Sanabria · BMO): With opportunities across SHOP, Canada, UK, and MOBs, what is the company’s key strategic priority?

A: Management said since their three-part strategy began they have been aggressively expanding the SHOP portion of the business and believe focusing on SHOP will deliver multiyear growth and value creation. The whole company is focused on expanding SHOP and managing it optimally.

"The whole company really is focused and driven around those because that is what we believe will deliver the multiyear growth and value creation opportunity." — Debra A. Cafaro (CEO·CHAIR)

are organic gains plateauing?

Q (Richard Anderson · Cantor): Does the recent quarter suggest same-store NOI growth and margin expansion are plateauing, since third quarter showed slight sequential changes?

A: Management said the quarter was strong and emphasized they have delivered double-digit NOI growth for 17 quarters in a row and that the portfolio has a long runway ahead. They said they are focused on the trajectory going forward and believe the outlook is positive.

"We are on this journey this growth journey. That we are on, and there is a long way to go." — James Justin Hutchens

where margin flow-through changes occur

Q (Michael Carroll · RBC): At what occupancy levels does incremental margin flow from ~50% to ~70% and how does portfolio mix affect the observed change?

A: Management said there is no bright line because it depends on product type and price point, and the highest-occupied communities are delivering the stronger margins. They said the flow-through is playing out as expected (low-90s into the 50s) and will continue as more communities move up in occupancy.

"I think it is playing out exactly as we expected." — James Justin Hutchens

regulatory risk as seniors market grows

Q (Michael Stroyeck · Green Street): Have you seen any legislation on rent regulation or labor that could increase long-term regulatory risk for senior housing?

A: Management said senior housing is consumer-driven and seniors/families choose it for its value, and that so far there has not been material traction in limiting access or revenue opportunities. They emphasized focusing on delivering quality care and value as the baby boomers enter markets.

"this is the wealthiest generation in history, the baby boomers, as they start to enter our markets" — Debra A. Cafaro (CEO·CHAIR)

expansion projects and development pipeline

Q (Baird): What expansion projects do you plan and how are you positioned for the next development cycle?

A: Management said they have been evaluating the portfolio and have planned expansion projects, citing Quincy Place as a highlighted ~$30 million project adding cottages next to a 100% occupied community. They said there are dozens of similar opportunities across the portfolio.

"We are we are adding cottages, you know, next to a community that is now 100% occupied." — James Justin Hutchens

debt market creating 2027 opportunities

Q (Barclays): Could debt market moves create more transaction volume in 2027 and will you face sellers who prefer refinancing over selling?

A: Management said their financial strength, relationships, and ability to close make them a desirable counterparty, and that moves in rates and capital markets make them an even more attractive buyer compared with others who must line up financing. They said those advantages helped close $5 billion so far this year and increase their popularity.

"The move. The global move in rates and the in the capital markets makes us an even more desirable counterparty in an acquisition because we do have that financial strength." — Debra A. Cafaro (CEO·CHAIR)