Ventas, Inc. · NYSE:VTR
Ventas — 2024 Nareit REITworld
45 slides from Ventas's conference presentation, Nov 18, 2024
Slide 1: 2024 Nareit REITworld
2024 Nareit REITworld November 18 – 19, 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 November Business 28 Driving Strong Update Execution and Cash Flow Generation 06 Ventas’s Strategy Throughout The Portfolio 11 Delivering Profitable Organic Growth in 32 Financial Strength & Senior Housing Flexibility 20 External Growth 34 Third Quarter 2024 Opportunities Result
Slide 4: November Business Update
4 November Business Update
Slide 5: Business Update: Full-Year 2024 Guidance
FULL-YEAR 2024 GUIDANCE As Presented 10/30/24 ▪ Re-Affirming guidance as presented on 10/30/24 ▪ Key Property Assumptions3: Net Income Attributable to Common Same-Store Cash NOI Growth Guidance Ranges (unchanged from $0.09 – $0.13 o Business Update Stockholders 10/30) As of November 18, Normalized F
Slide 6: Ventas's Strategy
Ventas’s Strategy
Slide 7: Ventas is a Leader in Real Estate
Ventas is a Leader in Real Estate Focused on the Longevity Economy: ~1,350 ~$41B +19% $1.80 Serving a large and PROPERTIES1 ENTERPRISE VALUE1 ANNUALIZED TSR SINCE 20002 ANNUALIZED DIVIDEND PER growing aging Including: Compared to: SHARE population with an emphasis on senior ~800 +13% Nareit HC REIT
Slide 8: 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 8
Slide 9: …and Drive Total Shareholder Returns
…and Drive Total Shareholder Returns Drive Total Company NOI and Normalized FFO per share growth Further enhance portfolio quality and operator diversification Increase SHOP scale Enable strong returns on capital Strengthen growing dividend capacity 9
Slide 10: Expanding SHOP Footprint and Increasing Enterprise Growth Rate
Expanding SHOP Footprint and Increasing Enterprise Growth Rate (As Presented October 30, 2024) 47% ~52% ~54% SHOP SHOP SHOP 43%+ Increasing VTR 31% 40%+ 16% 11% 11% participation in SH NNN SH NNN SH NNN multiyear SHOP growth opportunity 32% 30% 29% SHOP NOI OM&R OM&R OM&R percentage Other 21% Other
Slide 11: Delivering Profitable Organic Growth in Senior Housing
Delivering Profitable Organic Growth in Senior Housing (As Presented October 30, 2024) 11
Slide 12: Occupancy-Led Multiyear NOI Growth Opportunity
Occupancy-Led Multiyear ▪ 2024 SHOP Same-Store Cash NOI growth guidance range improved to 14% - 16% from previous 13% - 16% ▪ Expected 2024 average occupancy growth improved to ~290bp YoY, led by the U.S. NOI Growth Opportunity1 ▪ Higher occupancy levels expected to generate improved operating lever
Slide 13: Occupancy Growth Driving SHOP Outperformance
Occupancy Growth Driving SHOP Outperformance and ~9% Same-Store Revenue Growth in 3Q241 (As Presented October 30, 2024) U.S. SHOP SAME-STORE U.S. SHOP SAME-STORE CANADA SHOP SAME-STORE +400bp 84.0% 96.7% 3Q24 U.S. YoY Average Occupancy Growth U.S. September Average Occupancy +410bp Canada September
Slide 14: Strong SHOP Same-Store Performance
SHOP 3Q24 SAME-STORE CASH NOI 3Q24 KEY TAKEAWAYS ▪ Occupancy-led Same-Store Cash NOI growth of 15.3% YoY, led by U.S. growth of 17.5% $193.6 o 9 consecutive quarters of double-digit YoY Same-Store Cash NOI 15.3% Strong SHOP Same- growth ▪ Strong occupancy growth driven by broad-based demand and succ
Slide 15: U.S. Senior Housing Demand-Driven Occupancy
POISED TO CAPITALIZE ON EXPECTED SENIOR HOUSING GROWTH OPPORTUNITY WITH ACCELERATING DEMAND Opportunity to surpass U.S. 80+ Population2 prior occupancy peak U.S. Senior Housing Demand-Driven 20M 5 Years Post Financial Crisis Next 5 Years Occupancy +4% Growth +27% Growth Opportunity1 (As Presented Oc
Slide 16: Ventas OI Driving Outsized Performance
Ventas OITM Driving Outsized Performance RIGHT MARKETS (As Presented October 30, 2024) Proprietary data analytics and experiential insights platform drives portfolio actions and optimizes the right combination of markets, assets and operators Combines in-house senior housing operating expertise with
Slide 17: Highest-Performing SHOP Communities
Highest-Performing SHOP Communities Generate Higher RevPOR and NOI Growth CASE STUDY: PERFORMANCE OF COMMUNITIES WITH (As Presented October 30, 2024) ZERO LOST REVENUE DAYS IN SEPTEMBER Ventas OITM initiatives at highest performing communities seek to • 8 communities reached Zero Lost Revenue days f
Slide 18: Vast & Growing Data Advantage Creates a Competitive Moat
Why Our Advanced Data Capabilities Vast & Growing Data Advantage Creates a Are So Difficult to Replicate Competitive Moat (As Presented October 30, 2024) KEY CHALLENGE There is no industry-standard platform to collect and Ventas has spent years accumulating ~1 billion operational and analyze data fr
Slide 19: Portfolio Strongly Positioned For Expected Multiyear Net Absorption
Portfolio Strongly Positioned For Expected Multiyear Net Absorption (As Presented October 30, 2024) RIGHT MARKETS 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 expe
Slide 20: External Growth Opportunities Focused on Senior Housing
External Growth Opportunities Focused on 20 Senior Housing
Slide 21: 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 3% Publicly Traded and Fragmented Market Owner-Operator Opportunity To Expand SHOP 1.8M Units1 Footprint Through Value-Creating 84% U.S. Private-Pay Senior Housing External Growth Rest of Market 21 1. Based on available public c
Slide 22: Increasing Investments in Senior Housing
Increasing Investments in Senior Housing ~$2B of Senior Housing Investments ~$2B Closed / Under Contract Plus Line of Sight ~$300M ~$2B of Senior Housing Investments Meet Key Financial Criteria: Closed / Under Contract + Line • 7 – 8% expected Year- $1.7B $1.7B of Sight One NOI yield • Significant d
Slide 23: ~$2B of Senior Housing Investments Closed / Under Contract Plus Line of Sight
~$2B of Senior Housing Investments Closed / Under Contract Plus Line of Sight Summary Statistics: ▪ 7 – 8% Expected Year- One NOI Yield ▪ Significant Discount to Replacement Cost ▪ Low-to-Mid Teens Unlevered IRR Expectation 23
Slide 24: Investment Pipeline of Senior Housing Assets
ACTIVELY EXECUTING ON SENIOR HOUSING INVESTMENTS Investment Pipeline of Senior Housing Assets (As Presented October 30, INVESTMENT STRATEGY ALIGNS WITH VENTAS FINANCIALLY ATTRACTIVE TIME TO INVEST 2024) STRENGTHS Submarkets with supply / demand profile, Year-One FFO per share expected to with strong
Slide 25: $1.7B Senior Housing Investments Closed / Under Contract
$1.7B Senior Housing Investments Closed / ~$2B of Senior Under Contract Housing Investments Closed / Under Contract Plus Line of Sight Investment Stats for $1.7B Closed / Under Contract: > 44 Communities > Acuity Mix1: • 46% IL • 54% AL / MC RIGHT MARKETS RIGHT ASSETS RIGHT OPERATORSTM > 7 - 8% expe
Slide 26: 20-Community Portfolio Operated by Grace Management
INVESTMENT SPOTLIGHT 20-Community Portfolio Operated by Grace MGMT (As Presented October 30, 2024) EXECUTING OUR PLAYBOOK 20 Expanding with existing SHOP Communities operators with proven performance for Ventas $725M ($244K / Unit) Right Market I Submarkets that support continued growth from Criteri
Slide 27: 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 Peak Years f
Slide 28: Driving Strong Execution and Cash Flow Generation Throughout The Portfolio
Driving Strong Execution and Cash Flow 28 Generation Throughout The Portfolio
Slide 29: An Essential Role in the Longevity Economy
Growth in the 65+ Population3 An Essential Role in the Longevity Economy 26% By the year 2030 65+ Population Share of Total 1 in 5 (As Presented October 30, 2024) 24% U.S. Population 22% The 65+ population now makes up about 18% of the U.S. population, an all- Americans will be time high that is con
Slide 30: Leading National Outpatient Medical Platform
Leading National Outpatient Medical Platform Has Strong Performance Track Record and Significant Competitive Advantages (As Presented October 30, 2024) Advantaged Locations With Strong Credit Tenants Consecutive Years of >3% YOY Same-Store Cash NOI Growth1 Continuous, Compounding Growth 82% 3.4% 3.0
Slide 31: Triple-Net Update
BROOKDALE MASTER LEASE VENTAS REACHES AGREEMENTS WITH KINDRED & SCIONHEALTH ▪ 120 senior housing communities1 producing ~7% of Annualized Adjusted ▪ As announced in September, Ventas entered into agreements with NOI in 3Q24 with lease maturity of December 2025 Kindred and its parent company, ScionHe
Slide 32: Financial Strength & Flexibility
32 Financial Strength & Flexibility
Slide 33: Commitment to Financial Strength and Deleveraging
COMMITMENT TO FINANCIAL STRENGTH AND DELEVERAGING “Our 3Q net debt to EBITDA of 6.3 times has improved by 60 basis points since the start of the year, and we now have line of sight to our targeted 5 times to 6 times range.” – Robert F. Probst, 10/31/24 ~$11B Financial Strength & Net Debt to Further
Slide 34: Third Quarter 2024 Results & Improved 2024 Guidance
Third Quarter 2024 Results & Improved 2024 Guidance (As Presented October 30, 2024) 34
Slide 35: Third Quarter 2024 Financial Performance & Improved 2024 Guidance
THIRD QUARTER 2024 FINANCIAL PERFORMANCE & HIGHLIGHTS IMPROVED 2024 GUIDANCE ▪ Third Quarter 2024 Normalized FFO per share of $0.80, an increase of ~7% YoY, led As of 8/1/24 As of 10/30/24 by NOI growth in senior housing Net Income Attributable to ▪ Total Company YoY Same-Store Cash NOI grew 7.6% in
Slide 36: Appendix
36 Appendix
Slide 37: Non-GAAP Financial Measures Reconciliation
For the Three Months Ended September 30, 2024 June 30, 2024 Non-GAAP Net income attributable to common stockholders $ 19,243 $ 19,387 Financial Measures Adjustments: Interest expense 150,437 149,259 Reconciliation Loss on extinguishment of debt, net — 420 Adjusted EBITDA Taxes (including tax amounts
Slide 38: Net Income to NOI – Trailing 5 Quarters Reconciliation
For the Three Months Ended September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 Net Income to NOI – Net (loss) income attributable to common stockholders $ (71,124) $ (90,819) $ (14,312) $ 19,387 $ 19,243 Trailing 5 Quarters Adjustments: Reconciliation Interest and ot
Slide 39: Senior Housing Operating Portfolio Same-Store Cash NOI Reconciliations
Trailing 5-Quarter Comparison 3Q23 4Q23 1Q24 2Q24 3Q24 Total revenues $ 754,417 $ 775,195 $ 813,304 $ 817,600 $ 845,532 Senior Housing Adjustments: Operating Portfolio Revenues not included in cash operating revenues1 Revenue impact from change in FX (20,179) (2,001) (20,337) (324) (18,811) (1,489)
Slide 40: Outpatient Medical and Research Portfolio Reconciliations
Trailing 5-Quarter Comparison 3Q23 4Q23 1Q24 2Q24 3Q24 Total revenues $ 226,988 $ 222,722 $ 219,508 $ 219,559 $ 221,575 Outpatient Medical Adjustments: and Research Straight-lining of rental income (2,350) (2,989) (3,290) (3,482) (2,394) Portfolio Non-cash rental income (2,484) (2,144) (2,136) (2,22
Slide 41: Non-GAAP Financial Measures Reconciliation
For the Three Months Ended September 30, 2024 For the Three Months Ended September 30, 2023 SHOP OM&R Triple-Net Non-Segment Total SHOP OM&R Triple-Net Non-Segment Total Non-GAAP NOI $ 213,982 $ 144,096 $ 150,970 $ 4,102 $ 513,150 $ 180,702 $ 148,073 $ 155,965 $ 4,389 $ 489,129 Financial Measures Re
Slide 42: FFO and FAD Reconciliation
For the Three Months Ended Q3 YoY For the Nine Months Ended YTD YoY September 30, Change September 30, Change 2024 2023 ’24-’23 2024 2023 ’24-’23 Net income (loss) attributable to common stockholders $ 19,243 $ (71,124) n/m $ 24,318 $ 49,846 (51%) Net income (loss) attributable to common stockholder
Slide 43: Non-GAAP Financial Measures Reconciliation: 2024 Guidance
For the Year Ended December 31, 2024 SHOP OM&R Triple-Net Non-Segment Total High End Net income attributable to common stockholders $53 Non-GAAP Financial Depreciation and amortization4 1,283 Interest expense, G&A, other income and expenses 5 738 Measures NOI $868 $582 $605 $19 $2,074 Reconciliation
Slide 44: 2024 Guidance
Net Income and FFO Attributable to Common Stockholders2 NOI2 2024 Guidance1 FY 2024 FY 2024 - Per Share FY 2024 Dollars in millions USD, except per Low High Low High Low High share amounts, totals may not sum due to rounding, unaudited Net income attributable to common stockholders $36 $53 $0.09 $0.
Slide 45: Non-GAAP Financial Measures Reconciliation
For the Three Months Ended December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 Non-GAAP Net income attributable to common stockholders $ (90,819) $ (14,312) $ 19,387 $ 19,243 Financial Measures Adjustments: Interest expense 154,853 149,933 149,259 150,437 Reconciliation Loss on extingu