Ventas, Inc. Q1 FY2025 earnings call

• Ventas is focused on delivering superior, multiyear growth in senior housing, benefiting from secular, demographically driven demand. - SHOP delivered double digit NOI growth for the eleventh consecutive quarter, with 13.6% same store cash NOI growth, led by occupancy and rate. - Increased investment activity with $900M closed in senior housing investments YTD and full year guidance raised to $1.5B. - Enhanced portfolio composition through conversions, operator base expansion, and community refresh program. - Strong financial profile with improved leverage and liquidity, reaffirmed 7% normalized FFO per share growth for 2025, and SHOP to represent over half of NOI by year-end.

Ventas delivered $0.84 of normalized FFO per share in the first quarter, an increase of approximately 8% powered by the senior housing operating portfolio. SHOP’s 14% year-over-year cash same store NOI growth resulted from meaningful increases in occupancy and rate. Outpatient medical and research (OMAR) reported same store cash NOI growth of 1.3% year-over-year. Adjusting for cash fees received in outpatient medical, OMAR same-store cash NOI increased by 2.5% year-over-year. OMAR reaffirms full year same store cash NOI guidance range of 2% to 3%. The research portfolio same store cash NOI contracted modestly year-over-year, with a $200,000 reduction in NOI due to 30 basis points of lower occupancy.

• Reaffirmed normalized FFO per share guidance of 7% growth in 2025. - SHOP same store cash NOI guidance 11%-16% for full year. - Senior housing investment guidance raised from $1B to $1.5B. - OMAR same store cash NOI guidance 2%-3%.

• Macro-economic uncertainty. - Unpredictable clinical move outs in senior housing impacting occupancy. - Competition in acquisitions potentially leading to cap rate compression.

Q: James Cameron asked about SHOP dynamics, margin expansion, and replacement cost in buying markets.

A: Justin Hutchens responded on SHOP occupancy growth, margin expansion, newer vintage communities in investments, and replacement cost being below in buying markets.

Q: John Kilichowski inquired about investments, basis, and replacement cost.

A: Justin Hutchens explained drivers of higher per unit values in investments, newer communities, better markets, and replacement cost being at a steep discount.

Q: Michael Carroll asked about Brookdale asset transitions and disruption.

A: Justin Hutchens discussed positive performance of transitioning assets, outperformance vs remaining, and experience with transitions showing good growth post-disruption.

Q: Vikram Malhotra asked about March clinical move outs and pricing power.

A: Justin Hutchens explained clinical move outs are unpredictable, pricing power at 5% leap year adjusted, and Canada's pricing opportunity.

Q: Jeff Spector asked about leasing season and research portfolio strategy.

A: Debra Cafaro discussed strong leasing season and research portfolio as a credit business with steady performance.

Q: Richard Anderson asked about Brookdale transitions and leaving money on the table.

A: Debra Cafaro stated Brookdale portfolio is improving, with 45 assets moving to SHOP and remaining performing well with rent increases.

Q: Omotayo Okusanya asked about SHOP same store NOI growth slowing and life sciences NIH funding.

A: Bob Probst and Justin Hutchens discussed SHOP phasing with second half growth, and life sciences tenants being credit tenants with manageable impact from NIH funding changes.

Q: Juan Santabria asked about acquisition lumpy nature and shop clinical move outs.

A: Justin Hutchens and Bob Probst discussed acquisition lumpiness and focus on move ins and key selling season for shop occupancy.

Q: Seth Bersy asked about acquiring different types of assets for yield.

A: Debra Cafaro stated Ventas is eager to deploy capital for good risk-adjusted returns across different asset types.

Q: Austin Wurschmidt asked about RevPOR growth reacceleration and research portfolio occupancy.

A: Bob Probst and Justin Hutchens discussed RevPOR growth drivers and research portfolio redevelopment impact on occupancy.

Q: Michael Stroyak asked about research portfolio tenant base and occupancy trend.

A: Debra Cafaro and unidentified representative discussed research portfolio tenants as credit tenants and redevelopment impact on occupancy.

Q: Ron Camden asked about conversions and competition in acquisitions.

A: Justin Hutchens discussed conversion opportunities, competition in acquisitions, and Ventas' advantages in competing.

Q: Nick Yulico asked about move outs math and occupancy trends.

A: Justin Hutchens and Bob Probst discussed move out impact on occupancy and focus on trends and key selling season.

Q: Mason Guel asked about independent living vs assisted living occupancy and acquisition competition.

A: Justin Hutchens discussed occupancy growth in both and Ventas' advantages in acquisitions including relationships and financial strength.