Q2 2025 Ventas Inc Earnings Call

Bella: Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Ventas' second quarter 2025 earnings call. All lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one in your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Vijay Grant, Ventas' VP of Investor Relations. You may begin.

Hello and thank you for standing by. My name is Bella and I will be your conference operator. Today at this time I would like to welcome everyone to vantis second quarter 2025 earnings call all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number 1 in your telephone keypad to withdraw, your question, press star 1 again.

Vijay Grant: Thank you, Bella, and good morning, everyone, and welcome to the Ventas second quarter 2025 results conference call. Yesterday, we issued our second quarter 2025 earnings release presentation materials and supplemental information package, which are available on the Ventas website at ir.ventasreit.com. As a reminder, remarks today may include forward-looking statements and other matters. Forward-looking statements are subject to risks and uncertainties, and a variety of topics may cause actual results to differ materially from those contemplated in such statements. For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the Ventas website.

I would now like to turn the conference over to BJ Grant vantis SVP of investor relations. You may begin.

Thank you, Bella and good morning everyone. And welcome to the ventas. Second quarter, 2025 results conference call.

Yesterday, we issued our second-quarter 2025 earnings release, presentation materials, and supplemental information package, which are available on the Ventas website at Irving.

Results of different material from those contemplated in such statements.

Vijay Grant: Certain non-GAAP financial measures will also be discussed on this call, and for a reconciliation of these measures to the most closely comparable GAAP measures, please refer to our supplemental information package posted on the Investor Relations website. And with that, I'll turn the call over to Debra Cafaro, Chairman and CEO of Ventas.

For a more detailed discussion of those factors, please refer to our earnings release for this quarter and to our most recent SEC filings, all of which are available on the vent House website.

Certain non-gaap Financial measures will also be discussed on this call. And for our reconciliation of these measures to the most closely comparable gaap measures, please refer to our supplemental information package posted on the investor relations website.

Debra Cafaro: Thank you, Vijay, and happy birthday. I'd like to welcome all of our shareholders and other participants to the Ventas second quarter 2025 earnings call. We're pleased to report strong earnings growth and again raise our guidance as we execute our 1-2-3 strategy. Ventas is an essential participant in the longevity economy and is well-positioned to capitalize on the secular demand from the large and growing aging population our company serves. Both our advantage platform and our portfolio have been intentionally built to meet this moment and generate durable multi-year NOI growth driven by organic growth in our senior housing operating portfolio, or SHOP, and accretive senior housing investments. This engine of our growth is being supplemented by compounding contributions from the balance of our portfolio and our continually improving balance sheet.

And with that, I'll turn the call over to Deborah chairman and CEO of ventas.

Defense to the ventas. Second quarter, 2025 earnings call. We're pleased to report strong earnings growth and again, raise our guidance as we execute our 1233 strategy.

Then pass is an essential participant in the longevity economy and is well, positioned to capitalize on the secular demand from the large and growing aging population. Our company serves

both our advantage platform and our portfolio have been intentionally built to meet this moment and generate durable. Multi-year, noi growth driven by organic growth in our senior housing, operating portfolio or shop and a creative senior housing investments

Debra Cafaro: Our 1-2-3 strategy is designed to deliver superior FFO per share growth, enhance our financial strength, and create value for our shareholders. The second quarter demonstrated the positive impact of our approach. Year over year, normalized FFO per share grew 9%, and total company same-store cash net operating income, or NOI, increased 7%. We also raised our full-year normalized FFO guidance midpoint to $3.44 per share, representing 8% accelerating year-over-year FFO per share growth at the midpoint. And we also improved our company-wide same-store year-over-year cash NOI growth expectations to 7% at the midpoint. If achieved, these growth rates would put us in the upper echelon of REIT growers. Underpinning our strong results and improved expectations are the three components of our strategy. Let me take you through them in order. One, drive organic growth in our SHOP communities using our platform advantages, data analytics, and experience. Check.

This engine of our growth is being supplemented by compounding contributions from the balance of our portfolio. And our continually improving balance sheet.

Our 123 strategy is designed to deliver Superior ffo per share growth, enhance our financial strength, and create value for our shareholders.

The second quarter demonstrated, the positive impact of our approach.

Year-over-year, normalized ffo per share group, 9% and total company. Same store, Cash Net operating income or noi increased 7%.

We also raised our full year normalized ffo guidance. Midpoint to $3.44 per share, representing 8% accelerating year-over-year, ffo per share growth at the midpoint and we also improved our companywide, same store year-over-year cach. Noi growth expectations to 7% at the midpoint

if achieved these growth rates would put us in the upper echelon of Reed Growers.

Debra Cafaro: Our SHOP communities in the US delivered 18% same-store cash NOI growth in Q2, adjusting for a tax refund we received in the prior year. Revenue grew over 8% for the entire same-store SHOP portfolio, and average year-over-year occupancy growth accelerated intra-quarter and finished on a high note in June, with 60 basis points of sequential improvement in average occupancy. In June, move-ins reached their second highest level of any month in over five years. Two, make value-creating investments in senior housing. Check. We've raised our full-year 2025 senior housing investment volume guidance to $2 billion. Because of our advantage position and the increase in market activity, our pipeline of senior housing investments is growing, and we intend to build on our momentum as we identify and close compelling investments with low to mid-teens unlevered IRR expectations, robust current performance, and significant upside potential.

Underpinning our strong results and improved expectations or the 3 components of our strategy. Let me take you through them. In order 1 Drive, organic growth in our shop communities using our platform advantages data analytics and experience check.

Our shop communities in the U.S. delivered 18% same store cash NOI growth in Q2, adjusting for a tax refund we received in the prior year.

Revenue grew over 8% for the entire same store shop portfolio. An average year-over-year occupancy, growth accelerated intra quarter and finished on a high note, in June with 60 basis points of sequential Improvement in average occupancy in June, move-ins reached, their second, highest level of any month in over 5 years.

2 make value creating investments in senior housing check, we've raised our full year 2025 senior housing investment, volume guidance, to 2 billion dollars,

Debra Cafaro: And three, maximize performance in the balance of our portfolio. Check. Our outpatient medical and research portfolio is fueled by growth in the over-65 population, which will represent 20% of the US population by 2030. Outpatient medical is powered by our competitively advantaged in-house property management and leasing platform and is also benefiting from the accelerating trend toward outpatient activities. Our team delivered leasing and occupancy improvements both year over year and sequentially in Q2, and we expect year-over-year NOI growth to increase in the second half. Meanwhile, our institutionally based research portfolio, which is the smallest part of our business, represents about 8% of our NOI. Three quarters of that NOI comes from credit tenants under leases, with a weighted average lease term of nearly 10 years.

Because of our advantage position and the increase in Market activity, our pipeline of senior housing investments is growing. And we intend to build on our momentum, as we identify, and close compelling Investments with low, to mid teens on levered, Ira expectations, robust, current performance and significant upside potential.

And 3 maximize performance in the balance of our portfolio, check our outpatient medical and research portfolio is fueled by growth in the over 65 population, which will represent 20% of the US population by 2030.

Outpatient medical is powered by our competitively advantaged, in-house property management and leasing platform. And is also benefiting from the accelerating Trend toward outpatient activities.

Our team delivered Leasing and occupancy improvements both year-over-year and sequentially in Q2 and we expect year-over-year noi growth to increase in the second half.

Debra Cafaro: We continue to experience good institutional demand for our space, while the sliver of innovation and pre-revenue tenancy remains subject to the macro challenges facing the sector. All in all, backed by compelling demand for the services and activities in our sites, our space users generally have staying power and are finding ways to adapt and continue their important work. Closing on senior housing, we are already in the fourth year of double-digit NOI growth from our communities, and the multi-year NOI and occupancy growth opportunity ahead of us should continue for many years. The over-80 population should grow 28% in the next five years by 4 million individuals, as the leading edge of the baby boomers turns 80 in 2026, and more seniors than ever are choosing senior living for the benefits it provides. In fact, the number of individuals projected to turn 80 increases every year through 2038.

3/4 to that, noi comes from credit tenants under leases with a weighted average lease term of nearly 10 years.

We continue to experience good institutional demand for our space while the sliver of innovation. And pre-revenue tendency remains subject to the macro challenges facing the sector.

All in all, backed by compelling demand for the services and activities in our sights, our space users generally have staying power and are finding ways to adapt and continue their important work.

Closing on senior housing, we are already in the fourth year of double-digit, noi growth from our communities, and the multi-year, noi and occupancy growth opportunity ahead of us should continue for many years.

The over 80 population should grow 28% in the next 5 years by 4 million individuals, as the Leading Edge of the Baby Boomers turned 80 in 2026 and more seniors than ever are choosing Senior Living for the benefits. It provides

Debra Cafaro: At the same time, new starts in senior housing are hovering at record lows, with construction starts approximating only 2,000 units in Q2. We expect today's significant supply constraints to persist for an extended period. This combination of secular demand, which is expected to grow beyond the next decade, and factors suppressing supply should elongate Ventas' multi-year occupancy and NOI growth opportunity well into the future. Because we anticipated these conditions, we've taken focused actions to expand our SHOP footprint by 1,200 basis points in just over the last two years, and we expect SHOP NOI to represent over half our business by year-end. And along the way, we've built a formidable platform that leverages our advantages to enable exceptional environments attractive to our senior residents, drive performance through active asset management, curate our portfolio, and maintain mutually supportive engagement with our operators.

in fact, the number of individuals projected to turn 80 increases every year through 2038

At the same time, new starts and senior, housing are hovering at record lows, with construction starts approximating only 2,000 units in Q2.

We expect today's significant Supply constraints to persist for an extended period.

This combination of secular demand, which is expected to grow beyond the next decade and Factor suppressing Supply.

Should elongate ventosas, multi-year occupancy, and noi, growth opportunity, well into the future.

Because we anticipated these conditions, we've taken focused actions to expand our shop footprint by 12200 basis points in just over the last 2 years and we expect shop. Noi to represent over half our business by year end.

Debra Cafaro: Together, the highly favorable macro backdrop and our advantage capabilities should enable Ventas to thrive and create value for our shareholders over the near and the long term. Our whole team at Ventas is excited and aligned to go after these opportunities. And now I'm happy to turn the call over to Justin.

And along the way, we've built a formidable platform, that leverages our advantages to enable exceptional, environments attractive to our senior residents drive performance through active Asset Management. Curate our portfolio and maintain mutually supportive engagement with our operators together. The highly favorable macro drop backdrop and our advantage capabilities should enable ventas to thrive and create value for our shareholders, over the near and the long term.

Our whole team at fentes is excited and aligned to go after these opportunities.

Justin Hutchens: Thank you, Debbie. Let me first start with the second quarter. Our SHOP same-store portfolio delivered 8.2% revenue growth, driven by accelerating occupancy throughout the quarter and strong pricing, resulting in 5.3% Rev4 growth. The key selling season is off to a good start, bolstered by a very strong June and continued strength in July. Same-store SHOP occupancy grew by 240 basis points, led by the US, with growth of 290. Our operating partners, Atria, Sunrise, Discovery, and Sincerity, led the way in the US, while LeGroupe Meurisse in Canada continues to stand out with occupancy over 98%. Move-ins remained strong throughout the quarter and were exceptional in June, while move-outs normalized. June's sequential average occupancy growth versus May was particularly strong, with 60 basis points, led by the Holiday by Atria brand, contributing 110 basis points sequentially.

And now I'm happy to turn the call over to Justin.

Thank you, Debbie.

Let me first start with the second quarter.

Our shop same store portfolio delivered 8.2%. Revenue growth.

Driven by accelerating occupancy throughout the quarter and strong pricing.

Resulting in 5.3% rev 4 growth.

The key selling season is off to a good start and bolstered by a very strong June and continued strength in July

same store, shock aamc Group by 240 basis, points led by the US with growth of 290,

our operating Partners, Atria Sunrise, Discovery and sincerity led the way in the US.

While the group Maurice in Canada continues to stand out with occupancy over 98%.

Move in remains strong throughout the quarter and we're exceptional in June. We'll move out to normalized. June sequential. Average occupancy growth versus May was particularly strong with 60 basis points.

Justin Hutchens: We outperformed the NIC industry averages, as our communities located in the US top 99 markets outperformed NIC occupancy growth by 100 basis points year over year and 30 basis points sequentially. The SHOP portfolio delivered 13.3% NOI growth, driven by 16% in the US. When adjusting for the prior year tax refund, underlying NOI rose 15%, with the US up 18%. Expenses were roughly in line with expectations. A quick reminder, we raised SHOP guidance in May and still expect 270 basis points of occupancy growth, 4.5% on Rev4, 5% on expense, and a range of 12% to 16% NOI growth. 2025 marks our fourth consecutive year of double-digit NOI gains, as we continue to take deliberate actions to capitalize on the multi-year opportunity in senior housing.

led by the holiday by Atria brand contributing 110 basis points sequentially

We outperformed.

The Nick industry averages is our community is located in the US, top 99 markets outperformed. Nick occupancy growth by 100 basis points year-over-year and 30 basis points, sequentially.

The shop portfolio delivered 13.3%. Noi growth driven by 16% in the US.

When adjusting for the prior year tax refund. Underlying noi Rose, 15% with the us up 18%.

Expect expenses were roughly in line with expectations.

A quick reminder: we raised shop guidance in May and still expect 270 basis points of occupancy growth.

And a range of 12 to 16%, noi growth.

Justin Hutchens: Reminder, the primary determinant of occupancy for the full year is the timing and slope of the key selling season, which is performing well. We still have important months ahead, and we are working hard to finish strong. Moving on to senior housing strategic updates. As you know, our strategy is focused on the right markets, right assets, and right operators. Over the past five years, we have deployed the full range of portfolio actions underpinned by our Ventas OI data analytics to ensure that we are well-positioned to deliver outsized growth in our senior housing platform. Those actions include over 130 conversions from TripleNet to SHOP, over 260 transitions to new managers, over 110 dispositions, over 300 community refreshes, and over 190 acquisitions. Our ongoing active asset management is driving performance and positions Ventas to capture the compelling multi-year growth opportunity ahead in senior housing.

2025 marks, our fourth consecutive year of double-digit, noi gains as we continue to take deliberate actions to capitalize on the multi-year opportunity in senior housing.

Reminder the primary determinant of occupancy for the full year is the timing and slope of the key selling season which is performing well.

We still have important months ahead and we are working hard to finish strong.

moving on to senior housing, strategic updates, as you know,

Our strategy is focused on the right markets, right assets and right operators.

Over the past 5 years, we have deployed the full range of portfolio actions. Underpinned by our ventas oi data analytics to ensure that we are well positioned to deliver it outside growth in our senior housing platform.

Those actions include over 130, conversions from triple net to shop.

Over 260 transitions to new managers over 110 dispositions over, 300 Community refreshes and over 190 acquisitions.

Justin Hutchens: I'd like to take a few minutes to talk about aspects of the operator portion of the strategy. Adding new operators is essential to obtaining scale and density in markets, as well as expanding our relationship-driven investment opportunity set. I'm really excited about the progress we have made growing our SHOP operator footprint, reaching 36 operators as of July, from just 10 five years ago. We selectively grow with top-performing operators, with strong local market clusters, specialized product expertise, and deep leadership talent embedded close to community operations. Our scalable advantage platform enables us to match each community with the most effective operator, unlocking performance and growth across diverse markets. In a highly fragmented US senior housing landscape, supporting and expanding a high-performing operator pool is a key driver of our growth strategy.

Our ongoing active asset management is driving performance and positions vents off to capture the compelling. Multi-year growth opportunity ahead in senior housing

I'd like to take a few minutes to talk about aspects of the operator portion of the strategy.

Adding new operators is essential to obtaining scale and density in markets, as well as expanding our relationship driven investment opportunity set.

I'm really excited about the progress. We have made growing our shop, operator footprint.

Reaching 36 operators as of July from just 10 5 years ago.

We selectively grow with top performing operators with strong local market clusters, specialized product, expertise and deep leadership Talent, embedded close to community operations. Our scalable Advantage platform enables us to match each Community with the most effective operator.

Unlocking performance and growth across diverse markets.

Justin Hutchens: Importantly, these new relationships are also a major source of proprietary deal flow, as the majority of our transactions are relationship-driven rather than broadly marketed, creating a compounding growth effect across the enterprise. We work with operators in a number of ways, including driving price volume optimization and community transitions. For example, we are hitting our stride managing occupancy and rate growth, driving Rev4 and move-in volume. The Ventas OI team is actively driving price and volume optimization by collaborating closely with our operating partners to ensure that our senior housing communities are dynamically priced. This strategy leverages data-driven insights to strike the optimal balance between converting tours into move-ins and achieving competitive rate positioning in each market.

In a highly fragmented us, senior housing landscape supporting and expanding a high-performing. Operator pool is a key driver of our growth strategy.

Importantly, these new relationships are also a major source source of proprietary deal flow.

As the majority of our transactions are relationship driven rather than broadly marketed creating a compounding growth effect across the Enterprise.

We work with operators in a number of ways, including driving price, volume optimization and Community transitions. For example,

we are hitting our stride managing occupancy, and rate growth driving rev port and move in volume.

The ventas, oi team is actively driving price and volume optimization by collaborating closely with our operating Partners. To ensure that our senior housing communities are dynamically priced.

Justin Hutchens: By continuously analyzing market demand, lead conversion trends, and price elasticity, we're aligning incentives and decision-making to maximize both occupancy and rate performance, as evidenced by our strong move-in and Rev4 results, both among the best in the past several years. Another key area of focus is transitioning management. We remain committed to ensuring each community is aligned with the right operating partner and will continue to actively pursue transitions where we see an opportunity to enhance performance and achieve the optimal operator fit. For example, I'll give a quick update on our 26 independent living transition communities that we moved to three different operators by the end of 2023. Those communities are 84% occupied and are achieving an industry-leading 890 basis points of occupancy growth year to date versus prior year.

This strategy leverages data driven insights to strike the optimal balance between converting tours and to move in and achieving competitive rate positioning in each market by continuously annualizing market demand lead conversion, Trends, and price elasticity. We're aligning incentives and decision-making to maximize both occupancy and rate performance as evidenced by our strong move in and rev Port results. Both among the best in the past several years.

Another key area of focus is transitioning management. We remain committed to ensuring each Community is aligned with the right operating partner and will continue to actively pursue transitions where we see an opportunity to enhance performance and achieve the optimal operator fit.

For example.

I'll give a quick update on our 26 Independent Living transition communities, that we moved to 3 different operators by the end of 2023.

Those communities are 84% occupied and are achieving an industry-leading.

Justin Hutchens: They have now caught up with our Holiday by Atria portfolio, which is also 84% occupied in the US, both with significant runway ahead for continued growth. Moving on to portfolio positioning, the strategy of converting our lower occupied TripleNet communities to SHOP bolsters the long-term growth potential in the SHOP portfolio. By design, two-thirds of the portfolio is in the low 80% occupancy with significant upside opportunity. Balancing this approach, our investments in senior housing have focused largely on high-performing market-leading communities with upside around 90%. Recall, the next big conversion tranche is the 45 former Brookdale TripleNet communities. This portfolio is only 78% occupied, offering a long runway of growth ahead. The five transition operators that will run these communities moving forward are highly engaged and excited about creating value in this portfolio through aligned management agreements.

890 basis points of occupancy growth year to date versus prior year. They have now caught up with our holiday by Atria portfolio which is also 84% occupied in the us both with significant Runway ahead for continued growth.

Moving on to portfolio positioning.

The strategy of converting our lower occupied triple net communities to shop bolsters, the long-term growth potential in the shop portfolio.

Opportunity.

Balancing. This approach to our investments in senior housing has focused largely on high-performing, market-leading communities with upside around 90%.

Justin Hutchens: We have plans to refresh the portfolio with NOI-generating CAPEX, enhancing the competitive positioning of the communities. The portfolio is located in markets with strong tailwinds, and we continue to expect to double the NOI over time. Wrapping up SHOP, I continue to be energized by the strong performance and remain focused on the organic growth opportunity in the portfolio, supported by our very capable team and our excellent operators. Turning to investments, we've continued to execute on our strategy of acquiring attractive senior housing communities that are highly accretive relative to our cost of capital, improve our overall portfolio quality, and increase the company's growth rate. I'm pleased to once again raise guidance for the year to $2 billion, as our pipeline is increasing at a remarkable rate.

Recall. The next big conversion tranche is the 45, former Brookdale triple net communities. This portfolio is only 78% occupied offering a long Runway of growth ahead. The 5 transition operators that were run. These communities moving forward are highly engaged and excited about creating value in this portfolio, through aligned management agreements.

We have plans to refresh the portfolio. With noi, jittering capex, enhancing the competitive positioning of the communities. The portfolio is located in markets with strong tailwind and we continue to expect to double the noi over time.

Wrapping up shop.

I continue to be energized by the strong performance and remain focused on the organic growth opportunity in the portfolio, supported by our very capable team, and our excellent operators.

Justin Hutchens: Building on our strong first quarter, we've now closed $1.1 billion in senior housing investments year to date and $3 billion since the beginning of last year. We also look to expand on our momentum as our pipeline continues to be very active. Year to date, we have reviewed 41% more investment opportunities by dollar volume than during the same period last year. While the market has become more competitive in recent months, Ventas is a partner of choice, enabling us to source meaningful and attractive transaction volume, meeting our targeted criteria. The senior housing investments closed year to date have an expected year-one cash yield of 7.2% and low to mid-teens unlevered IRRs, in line with our historical senior housing investment activity over the past 18 months.

Turning to Investments, we've continued to execute on our strategy of acquiring attractive, senior housing communities, that are highly, ACC creative relative to our cost of capital improve, our overall portfolio, quality and increase, the company's growth rate I'm placed at. Once again, raise guidance for the year to 2 billion as our pipeline is increasing at a remarkable rate.

Building on our strong first quarter. We've now closed 1.1 billion in senior housing investments year to date and 3 billion since the beginning of last year.

We also looked to expand our our normal minimum as our pipeline continues to be very active year to date. We have reviewed 41% more investment opportunities by Dollar volume than during the same period last year. While the market has become more competitive in recent months, ventas is a partner of choice enabling us to Source. Meaningful and attractive transaction volume meeting our targeted criteria.

Justin Hutchens: These assets complement and improve our broader portfolio, generally offer a full continuum of care and services, are newer vintage and are located in fast-growing markets with projected demand well above the national average. In summary, I'm happy to see solid execution across parts one and two of our strategy. First, driving profitable organic growth by enhancing operating performance, optimizing pricing and occupancy, and leveraging our data-driven Ventas OI platform in close collaboration with our high-performing operators. And second, capturing value through external growth with a targeted focus on high-quality senior housing acquisitions. I truly believe the best is yet to come as we face unprecedented favorable supply-demand fundamentals, and we continue to improve upon our SHOP performance and leverage our advantage position to grow externally. Now I'll hand the call to Bob.

The senior housing investments closed year to date have an expected year, 1 cash yield of 7.2% and low to mid teens on levered IRS in line with our historical senior housing investment activity, over the past 18 months.

These assets compliment and improve our broader portfolio, generally offer a full Continuum of Care and services are newer vintage and are located in fast. Growing markets with projected demand. Well above the national average

In summary. I'm happy to see solid execution across parts 1 and 2 of our strategy.

First driving profitable organic growth by enhancing operating performance, optimizing pricing and occupancy and leveraging. Our data-driven vents SOI platform in close collaboration with our high-performing operators and second. Capturing value through external growth with the targeted focus on high-quality senior housing, acquisitions.

I truly believe the Best is Yet to Come. As We face unprecedented, favorable Supply demand fundamentals and we continue to improve upon our shop performance and leverage, our advantage position to grow externally.

Bob Probst: Thank you, Justin. I'll provide an update on our financial results, balance sheet, and capital markets activities in the second quarter and close with our improved outlook for the year. Ventas delivered strong operating performance in the second quarter and posted normalized FFO of 87 cents per share, representing approximately 9% year-over-year growth. Our total company same-store cash NOI grew nearly 7%, led by SHOP increasing over 13%. Our outpatient medical and research business, or OMAR, reported same-store cash NOI growth of 1.7% year-over-year, led by outpatient medical, which grew NOI by 2.2%. Outpatient medical increased same-store occupancy by 20 basis points sequentially and 30 basis points year-over-year to 90.1%. Leasing was robust, with 1 million square feet of new and renewal deals executed in the second quarter and tenant retention of strong 86%.

Now, I hand the call to Bob.

Thank you, Justin.

I'll provide an update on our financial results, balance sheet and capital markets activities in the second quarter and close with our improved outlook for the year.

Ventas delivered strong operating performance in the second quarter and posted normalized FFO of $0.87 per share.

Representing approximately 9% year-over-year growth.

Our total company seems to store cash. Noi grew nearly 7% led by shop. Increasing over 13%.

Our outpatient medical and research business for Omar.

Reported. Same store cach. Noi growth of 1.7% year-over-year led by outpatient Medical.

Which grew noi by 2.2%.

Outpatient medical increased same store occupancy by 20 basis. Point sequentially and 30 basis points year-over-year to 90.1%

leasing was robust.

With 1 million square feet of new and renewal deals executed in the second quarter.

Bob Probst: Same-store cash NOI in our research business, which represents 8% of declined less than 1% year-over-year, or approximately $100,000, driven by lower rents on certain Innovation Flex space tenants, as previously discussed. Our balance sheet strengthened further in the second quarter. Ventas reported second quarter net debt to EBITDA of 5.6 times, which represents a 40 basis point improvement since the start of the year and a 10 basis point sequential improvement from the first quarter. We expect our leverage to continue to trend lower through a combination of the organic growth and equity-funded investments in senior housing. Speaking of, we have effectively funded the $2 billion of investments now in our guidance, with $1.8 billion of equity already raised and $160 million in completed dispositions.

And tenant retention of strong 86%.

same store cach noi and our research business, which represents 8% of

Decline less than 1% year-over-year or approximately a hundred thousand dollars.

Driven by lower rents on certain Innovation Flex space tenants as previously discussed.

Our balance sheet strengthened further in the second quarter.

Fantastic reported second quarter, net debt to ebitda of 5.6 times.

And attend basis points, sequential improvement from the first quarter.

We expect our leverage to continue to Trend lower through a combination of the organic growth and Equity funded investments in senior housing.

speaking of,

We have effectively funded the 2 billion of Investments. Now, in our guidance,

With 1.8 billion of equity already raised.

Bob Probst: We're also holding a record level of liquidity at $4.7 billion as of June 30, bolstered by our revolving credit facility upsize completed in April and over $700 million of available equity proceeds from unsettled equity forward agreements. This liquidity also includes $500 million of senior notes proactively raised in May at 5.1%, thereby early refinancing our remaining 2025 maturities, principally due at the end of August at a 2.7% rate. I'll close with our updated guidance. As a reminder, we increased our 2025 full-year guidance in late May, led by our encouraging SHOP performance as we entered the key selling season in the second quarter. And we're pleased to once again raise our guidance. We now have income attributable to common stockholders, 47 cents to 52 cents per fully diluted share.

In 160 million, in completed dispositions.

We're also holding a record level of liquidity at 4.7 billion as of June 30th.

Bolstered by our revolving credit facility. Upsize completed in April.

In over 700 million of available, Equity proceeds from unsettled, Equity, 4 agreements.

This liquidity also includes 500 million of senior notes proactively raised in May at 5.1%.

Thereby early refinancing our remaining 2020 25's principally principally due at the end of August at a 2.7% rate.

I'll close with our updated guidance. As a reminder, we increased our 2025 full-year guidance in late May.

led by our encouraging Shop Performance as we entered the key selling season in the second quarter.

And we're pleased to once again. Raise our guidance.

We now income attributable to Common stockholders.

Bob Probst: We have increased the midpoint of our full-year normalized FFO guidance by 3 cents, $3.44 per share, from the previous midpoint of $3.41, which represents approximately 8% year-over-year FFO growth. Our improved full-year midpoint is driven by a 2 cent increase from lower net interest expense and a 1 cent improvement from increased senior housing investments, FX, G&A, and other items net out to complete the bridge. We've raised and narrowed our total company same-store cash NOI to now approximate 7% year-over-year at the midpoint, being reaffirmed midpoints for SHOP and OMAR and an improved midpoint for TripleNet. A final note on balance of the year FFO phasing. Dilutive dispositions of non-strategic post-acute assets in the second quarter are approximately a penny FFO headwind per quarter sequentially versus the second. For additional 2025 guidance assumptions, please see our second quarter supplemental and earnings presentation deck posted to our website.

47 cents to 52 cents per fully diluted share.

We have increased the midpoint of our full year normalized. Ffo guidance by 3 cents to $344 per share.

From the previous midpoint of 3,041 cents.

Which represents approximately 8% year-over-year? Ffo growth?

Our improved full year made point is driven by 2 cent increase from lower net interest expense.

And a 1 cent improvement from increasing your housing investments.

FX GNA and other items net out to complete the bridge.

we've raised and narrowed our total companies, same store, cash, noi to now, approximate 7% year-over-year at the midpoint

Being reaffirmed midpoints for shop in Omar and an improved midpoint for triple net.

A final note on the balance of the year, FFO phasing.

Dilutive dispositions of non-strategic, post-acute assets in the second quarter.

Are approximately a penny ffo head when per quarter sequentially versus the second.

Bob Probst: To close, we delivered differentiated growth in the first half of 2025, led by the multi-year secular demand growth in our senior housing business. The entire Ventas team remains focused and committed to delivering superior performance for our... With that, I'll turn the call back to the operator.

For additional 2025 guidance assumptions, please see our second quarter supplemental and earnings presentation deck posted to our website.

Close. We deliver differentiated growth in the first half of 2025.

Led by the multi-year secular demand growth in our senior housing business.

the entire event toss, team remains focused and committed to delivering Superior performance for

With that, I'll turn the call back to the operator.

Bella: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Michael Carroll with RBC Capital Markets. Your line is now open. Please go ahead.

At this time, I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad. We will pause for just a moment to compile the Q&A roster.

Analyst: Yeah, thanks. Justin, I want to focus on the SHOP occupancy gains that you reported in the second quarter. I know the year-over-year trend improved throughout the quarter, but can you provide some additional color? Like, what was the sequential occupancy gain in Q2-25, maybe versus Q2-24, or maybe what is the year-over-year occupancy gain that you're at for like the month of July? Because I believe that the documents continue to highlight that the strength of the occupancy you saw in Q2 continued into July.

Your first question comes from the line of Michael Carroll with RBC Capital markets. Your line is now open. Please go ahead.

Justin Hutchens: Sure. So let me just, I'll step back and I'll address your question as close to it as I can. So first of all, you know, we've had really strong move-in activity all year. It was, as Debbie mentioned, particularly strong in June, having one of the best months that we've had in a number of years. We had 60 basis points of sequential occupancy growth in June versus May. July is off to a good start, and we would expect it to be sequentially as good or better in the month of July. So good continued momentum, strong tourists, strong move-in activity, and you know, the key selling season is off to a good start.

Yeah, thanks. Uh, just don't want to focus on the shop occupancy gains that you reported, um, in the second quarter. I know the year-over-year trend through improved throughout the quarter. But can you provide some additional color? Um, like what was the sequential occupancy gain in 2q 255, maybe versus 2q, 24 or maybe what is the year-over-year occupancy? Gain that you're at for like the month of July. Cuz I believe that the documents continue to highlight that the strength of the occupancy. You saw in 2q continued in into July

Sure, so, um, let me just step back and I'll I'll address your question.

It's close to, as I can. So, um, first of all, you know, we've had really strong movement activity all year.

Um, it was as Debbie mentioned particularly strong in June, having 1 of the best months that we've had in, in a number of years,

we had 60 basis points to sequential occupancy growth in June versus Mets. July is often a good start and we would expect it to be sequentially as good or better, um, in in the month of July,

Um, so good continued momentum, strong tourist, strong movement activity. Um, and, uh, you know, the key selling season's off to a good start.

Analyst: Great. And then just touching back on your comments on the transaction market, I know the competitive landscape is getting a little bit more, I guess it's ratcheting up a little bit. So what are you seeing? Is your hit rate going lower because you're tracking more deals now, just given that there's more competition, and/or do you need to get a little bit more aggressive on your pricing for some of these deals? I mean, how has that trended?

Great and then um just touching back on your comments on the transaction Market. I know the competitive Landscapes getting a little bit more. Um,

Justin Hutchens: Yeah, so we've been, you know, really leaning in more. If you look at the transaction activity we've had, the $3 billion that is closed, most of that is closed in the fourth quarter of last year and the first half of this year. And so, if anything, the momentum's been picking up, and we've been in this continuous kind of process of, you know, being able to update our investment volume guidance as a result. So the thing driving really the pipeline is there's just more deal activity in the market, period. And we are leaning in to the types of transactions that we want to pursue, and those are the high-performing communities with upside, communities that are well-positioned in markets with strong tailwinds. We've been buying newer communities with well-established track records with operators that are delivering excellent performance.

You're seeing is, is your hit rate going lower? Because you're tracking more deals. Now, just given that there's more competition and or do you need to get a little bit more aggressive on your pricing for some of these deals? I mean how has that trended?

yes, so we've been, you know,

Really leaning in more. If you look at the transaction activity, we've had the 3 billion that that is closed. Most of that is closed in the fourth quarter of last year in the first half of this year. And so um, if anything the momentum's been picking up and we've been in this continuous kind of process of you know of being able to update our our investment volume guidance as a result. Uh so the the think driving really the the pipeline is there's just more deal activity in the market period.

um, and we are leaning in um, to the types of transactions that we want to pursue and those are the high performing communities with upside communities that are, well, positioned in markets with strong Tailwind, we've been buying newer communities,

Justin Hutchens: And when you're buying communities that have strong performance, the operators have tremendous clout in the process. And one of our greatest strengths is the relationships we have with our operators. And so that's been playing well for us as well. So I would say, you know, there's momentum in the investment activity, and there's also more available in the market. So we're using the strength of our platform to maximize that opportunity.

Uh, with well established track records with operators. Uh, they're delivering, excellent performance. And and when you, when you're buying communities that have strong performance, The Operators, have tremendous clout in the process and 1 of our greatest strengths is the relationships. We have with our operators and so that's been playing well for us as well. So, I would say, um, you know, it there's momentum in the investment activity.

Analyst: All right, thanks.

Ity. Um and uh and there's there's also more available in the market. So we're using our the strength of our platform to maximize that opportunity.

Bella: Your next question comes from the line of Jeff Spector with Bank of America. Please go ahead.

All right, thanks.

Analyst: Great, thank you. My first question is on the record move-ins you've been discussing. Can you tie that into some of your company initiatives to improve those move-ins? Maybe faster turnover? Thank you.

Your next question comes from the line of Jeff Spectre with Bank of America. Please go ahead.

Justin Hutchens: Yeah, sure. So, you know, really the power of the OI platform is three things working together. One is we have tremendous data analytics, and our data analytics are really geared across all the operating metrics, but we're especially good at top line, and our team is as well. So when our team is deploying, you know, the OI initiatives, we're very top-line focused, and we've been especially focused on independent living. So our independent living occupancy is on the better side of the trends that we've been discussing. One good example is with Holiday, where, you know, it's an independent living platform. Atria leads that brand, and my team has really joined with their team to drive sales. In recent months, there's a number of initiatives underway that we've worked on together, and Lindsay and team have been completely plugged in with them.

Great. Thank you. My first question is on the record movement you've been discussing. Can you tie that into some of your company initiatives to improve those move-ins and maybe achieve faster turnover? Thank you.

Sure. So you know the the the really the power of the oi platform is is 3 things working together 1 is we have tremendous, you know, data analytics, and our data analytics are really geared.

Across all the operating metrics, um but we're especially good at Top Line and our team is as well. So when when our team teams deploying you know the oi initiatives, we're very Topline focused and we've been especially focused on Independent Living. So our independent living occupancy is on the better side of the of the trends that we've been discussing. Um, what good example is with holiday, um, where you know, it's an independent living platform, Atria um leads that brand and my team is really joined with their team.

Justin Hutchens: And so it's as hands-on as we've been in execution, and Atria has just been a tremendous partner in working with us to drive really exciting growth. You know, like I said, that portfolio was 110 basis points sequentially of growth in June versus May. So very, very good outcome. But we do work across the board with all of our operators, literally in almost a day-to-day, but a week-by-week update on sales execution. So it's very much real time.

Analyst: Great, thank you. And then my second question is on the big beautiful bill. Can you talk about your latest thoughts on the potential impact across maybe the broader potential changes across different healthcare asset classes and any changes in your thoughts in terms of opportunities or any of, you know, again, your exposure? Thank you.

To drive, um, sales. Um, in recent months there's a number of initiatives underway that we've worked on together, um, and uh, Lindsay and team have been completely plugged in with them and so it's it's Hands-On as we've been in execution and H is just been a tremendous partner and working with us to drive, really exciting growth. You know, like I said, they they were that portfolio was 110 basis points. Sequentially of growth in June versus May so very, very good outcome. Um, but we do work across the board with all of our operators, um, literally in a almost a day-to-day, but a week by week, um, update on on sales execution. So it it's very much real time.

Great. Thank you. And then my second question is on, uh, the big beautiful bill? Um, can you talk about your latest thoughts on the potential impact across, uh, maybe the broader potential changes across different Healthcare, asset classes, and and any changes in your thoughts, in terms of opportunities or or any of uh, you know, again your your exposure, thank you.

Debra Cafaro: Yes, this is Debbie. In terms of the bill's impact, I think the most important thing to note is that many of the aspects of the bill are on a very delayed implementation basis. And so in the immediate term, we're expecting kind of minimal impact. And I'm speaking broadly now, not about Ventas, but just from a policy standpoint broadly, most of the changes will take effect over a long period of time. Some of them don't even kick in until fiscal year 2028. So that's important. There may be changes or improvements, frankly, before some of the provisions even kick in. As I mentioned in my remarks, you know, our biggest business outside of senior housing is outpatient medical.

Debra Cafaro: The biggest drivers of outpatient medical continued success is really the demand from the over-65 population, and then this trend toward outpatient, which actually could be furthered by some of the provisions in the bill. So that's how we think about the impact there. And really, that's all I have to say about it. I mean, it's obviously going to have effects. They'll be extended over time. Most of the key providers are very expert at being resilient and adaptable to changes. That's what they live with year in and year out, and those are the people we generally do business with. So that's how I would conclude.

Um, if I mentioned in my remarks, you know, our our biggest business outside of senior housing is outpatient medical. Um, the biggest drivers of outpatient medical continued success is really the demand from the over 65 population and then this trend toward outpatient, which actually could be, um, furthered by some of the provisions in the bill. So, we, uh, that's how we think about the impact there and, um,

Analyst: Okay, thank you.

That you really, that's all I have to say about it. I mean, it's obviously going to have a fax, they'll be extended over time. Most of the key providers are very expert at being resilient and adaptable to changes. That's what they live with year in and year out. And those are the people we generally do business with so um that's how I would conclude.

Debra Cafaro: Thank you.

Bella: Your next question comes from the line of Jim Camert with Evercore. Please go ahead.

Okay, thank you.

Thank you.

Analyst: Good morning. Thank you. Give Justin a break, perhaps. Thinking about the outpatient medical portfolio, just following on the following question, your opening remarks, Debbie, it looks like the portfolio, you know, a total basis has been hovering very steadily in the 89, 90% threshold. What was the historical high for the outpatient medical occupancy-wise?

Your next question comes from the line of Jim Kart with Evercore. Please go ahead.

Good morning, thank you. Um, give Justin a break perhaps thinking about the outpatient medical portfolio, just following on the following question and your opening remarks. Debbie it looks like the portfolio. You know a total basis has been hovering very steadily in the 89 90% threshold. What was the historical high for the outpatient? Medical

I can see wise.

Bob Probst: Historical high would be, you know, this is Pete, by the way. Historical high is probably a percent or two higher. You know, 93, 94%. You know, we have buildings that have, you know, many tenants in each of the buildings, and so there is a structural occupancy. I kind of view like the maximum occupancy you could get in our portfolio is 95%. So we've been a percent or two below that, and I view it as opportunity, actually, from where we are today to where we can get to at 95%, and that's going to drive growth long term.

Uh, historical high would be, you know, this is Pete by the way, uh, historical high is probably a percent or 2 higher, you know?

93, 94%. You know, we have buildings that have.

Analyst: That's helpful, Pete. And then just to follow on to that, what are your representative escalators on that portfolio today? If you're signing up a new tenant or releasing space, what sort of annual escalators can you achieve? Thank you.

You know, many tenants in each of the buildings. And so, there is a structural occupancy. I kind of view like the maximum occupancy, you could get in our portfolio is a 95%. So we've been a percent or 2 below that and we're, I view it. As opportunity actually from where we are today to where we can get to at 95% and that's going to drive growth, long term.

Bob Probst: Almost. They're right around 3%. For the quarter, it was 3% in the annual escalators. I think the portfolio is just a hair below that, like 2.8, 2.9, but we're right there, and we're trying to push it beyond.

That's helpful. Peter then just the following to that. What are your representative escalators on that portfolio? Today, if you're signing up a new tenant or releasing space, what sort of annual escalators can you achieve

Debra Cafaro: And, you know, of course, the higher occupancy, the charges get passed through, so the expenses are covered by the tenants. So that's a pure bottom line impact, which is good, and Pete's going to keep working on that. We talked in the presentation about the sequential and year-over-year occupancy growth, which we are hoping to continue.

Thank you, almost there right around 3% for the quarter. It was 3% in the annual escalators, I think the portfolio is just a hair below that, like 2829, but we are. We're right there. And, uh, we're trying to push it Beyond. And you know, of course, the the higher occupancy, the, the charges get passed through. So, the expenses are covered by the tenants. So that's a pure bottom line impact, um, which is good. And, uh,

Bob Probst: Yeah, I mean, one other fact you didn't ask about, but also Walt's eight years this quarter. It's fantastic. Really happy.

Analyst: All right, thank you, folks.

Pete's going to keep working on that. We we talked in the uh, presentation about the sequential and year-over-year occupancy growth which we are um, hoping to continue. Yeah, I mean 1 other factor and ask about, but also Walt 8 years, this quarter, it's fantastic.

Really happy.

Debra Cafaro: Thank you.

Great. Thank you, folks.

Bella: Your next question comes from the line of John Kilchoski with Wells Fargo. Please go ahead.

Thank you.

Analyst: Hi, thank you. Good morning. You know, my first one is sort of on the makeup of, you know, your more stabilized portfolio and the RevPor and incremental margins, let's say above 90% occupancy. More of an exercise in medium to long-term growth for this portfolio, but how could we, you know, think about that and back into what's a better run rate, you know, once this portfolio fully leases up?

Your next question comes from the line of John Keltoi with Wells Fargo. Please go ahead.

Debra Cafaro: And that's SHOP, right?

Hi, thank you, good morning. Uh, you know, my first 1 is, is sort of on the, the makeup of, you know, your more stabilized portfolio and the Rev poor and incremental margins, let's say above, 90% occupancy. Um, more of a an exercise in medium to long-term growth for this portfolio. But how could we, you know, think about that and, and back into what's a better run rate. You know, once this portfolio fully leases up.

Analyst: Yes, correct. That's SHOP.

Debra Cafaro: Okay, Justin's going to take that.

Justin Hutchens: Okay, yeah, so, you know, we are, you know, we have just a little, it's one of my favorite topics, this margin expansion opportunity in senior housing because of the operating leverage in the business. So we do use some rule of thumbs, and we test this on our portfolio, and they definitely hold up. And we've continued to test it as our occupancy has been growing, and we have a better representation of this outcome. And what it is, is when, you know, you get higher occupancy, do the higher fixed costs that are in place, the higher, therefore, operating leverage, you start having better flow through in your margin. You get over 90% occupied, up to 100%, you would see around 70% incremental margin during that period. In the 80 to 90% band, you'll see around 50% margin.

And that's shop, right? Yes. Correct that shop. Okay, just Justin's going to take that. Okay, yeah, so you know, we are, you know, we have um,

Just a little, it's 1 of my favorite topics.

This margin expansion opportunity, senior housing because of the operating leverage in the business. Um, so I we do use some rule of thumbs and we test this on our portfolio and they they definitely hold up. Um and we've continued to test it. As our occupancy has been growing, we have a better representation of this outcome.

Justin Hutchens: For those of us that like to track month to month and quarter to quarter performance, you know, there's obviously one-timers that can throw those stats off here and there, but over time, that's the rule of thumb, and it's how it's playing out in our portfolio. So if you think about our portfolio, in fact, that two-thirds of it has low 80% occupancy, we are a long way off from what is the best part of the growth in this industry, which is, you know, when the operating leverage kicks in. And so when we talk about the best is yet to come, obviously, there's really good supply and demand fundamentals, but our portfolio is also positioned for growth as well, and that's part of why we're positioned so well.

And what it is is when, you know, you get higher occupancy due to the high higher fixed costs that are in place. The higher, therefore, operating leverage, you start having better flow through in your margin. You get over 90% occupied up to 100%. You would see around 70% incremental margin um during that period in the 80, to 90% band, you'll see around 50% margin.

So, if you think about our portfolio and the fact that 2/3 of it has low 80% occupancy. We are a long way off from, what is the best part of the growth in this sector in this industry which is you know, when the operating leverage kicks in. And so, when we talk about The Best Is Yet To Come,

Analyst: Thank you. And the other part of that was just the RevPor component. I don't know if you could speak to the difference in that and your lower occupied assets versus a delta.

Obviously there's really good supply and demand fundamentals, but our portfolio is also positioned for growth as well. And that's that's part of why why we're positioned so well.

Justin Hutchens: Yeah, there is. So, you know, a couple of ways to look at that. You know, one way we like to talk about is RevPor growth when you're over 90% is 2X what it is when you're under 90% occupied. To bring some more specifics to that, you know, if you're in that 90 to 95% band, you're around 6 or 7. If you're 75 to 90, you know, there's a range of 3 to 5% RevPor growth. And if you're below 75% occupied, you're around 1%. So as your occupancy goes up and your scarcity value increases, the RevPor moves with that.

Thank you. And the other part of that was just the Rev 4 component. I don't know if you could speak to the difference in that and your lower occupied assets in terms of a delta. Yeah.

Yeah there is um so you know a couple ways to look at that. You know, 1 way we like to talk about is Rev for growth when you're over 90% is 2x what it is when you're under 90% occupied.

Um, to bring some more specifics to that, you know, if you're in that 90 to 95% ban, it you're around 6 or 7. Um, if you're 75 to 90, you know, there's a range of 3 to 5% rev 4 growth, and if you're below 75% occupied, you're around 1%.

Analyst: Okay, that was very helpful. And my second question is just on the TAM and the space. You announced the incremental $500 million. You know, obviously, we could look at all of senior housing, but you made it clear there's a certain quality of product that you're interested in. So I'm curious if you've done the work and can speak to the size of the addressable market left out there today that is owned by the REITs that you'd be interested in transacting on.

Um, so as your occupancy goes up, um, and your scarcity value increases, you're the ref for moves with that.

Justin Hutchens: Yeah, I mean, we've looked at it a lot of different ways, and it generally comes down to this, you know, the REITs own what, about 15% of the market, and you know, there's probably about another 40 or 50% of the market that actually checks all of our general criteria, meaning it's in the right type of market, right size of asset. And so there's a lot to go after still. You usually see somewhere around $30 billion a year of trading in senior housing, and you know, so there's plenty for us to get our fair share each year, and that's what we've been working on.

Okay. That was very helpful and my second question is just on the, on the Tam of the space, you announced the incremental 500 million. Um, you know, obviously we could look at all of senior housing but you made it clear this a certain quality of product that you're interested in. So I'm curious if you, you know, if you've done the work and can speak to the size of the addressable Market left out there out there today, that isn't owned by the rez that you'd be interested in transacting on.

Analyst: Very helpful. Thank you.

Yeah, I mean, it's, we've looked at it a lot of different ways and it, it generally comes down to, um, this, you know, the retail and what about 15% of the market. Um, and you know, about there's a probably about another 40 or 50%, um, of the market that actually checks all of our general criteria, meaning it's in the right type of market, right size of asset. Um, and so there's a lot to go after still. Uh, you usually see somewhere around 30 billion uh a year um of trading and senior housing um and you know so there's plenty for us to get our fair share each year and that's what we've been working on.

Bella: Your next question comes from the line of Wes Goliday with Baird. Please go ahead.

Very helpful. Thank you.

Analyst: Hey, good morning everyone. Can you talk about the RevPor growth acceleration? Was that more of a mixed shift, or is it higher movements? What's going on there?

Your next question comes from the line of Wes caller day with B. Please go ahead.

Justin Hutchens: Yeah, sure. So, you know, I mentioned in my prepared remarks that we're focused on price volume optimization, and this is another area where the OI team is highly engaged with the operators. I think everyone knows that senior housing does not have good price transparency. So unlike multifamily or apartments, it's harder to dynamically price, but we found a way through data analytics to really focus in on the right price to do two things, either just give a higher price or to drive volume. And so that's a continuous process, you know, with our data analytics and then the execution with the operators, and then incorporating that with any feedback the operator is seeing on the ground. And we've been working on it for a few years, and the execution of that process is the best it's been. And so you ask about mix.

Hey, good morning everyone. Uh can you talk about the repport growth acceleration? Was that more of a mix shift or is it higher movements? What's going on there?

Justin Hutchens: Mix can definitely impact RevPor, and it does. But in the numbers we're seeing today, it actually didn't. You know, the mix is exactly really close to exactly what we had expected to see. So what's really driving the underlying trend are higher moving rents and then continued strength in our internal rent increases. And so that's something we'll stay very focused on, and we're trying to pull both levers. We want to see occupancy and rate grow, and we've made the best connection recently of both moving together.

Mentioned my prepared remarks that we're focused on price volume, optimization. And this is another another area where the oi team is highly engaged with the operators. Um, I think everyone knows that senior housing does not have good price transparency so unlike multi-family, uh, or apartments, uh, it it's harder to dynamically price but we found a way through a data analytics to really focus in on the right price to do 2 things either. Just get higher price or to drive volume. So that's a continuous process, you know, with our data analytics and then the execution with the operators and then incorporating that with any feedback, the operator seeing on the ground and we've been working on it for a few years and the execution of that process is the best. It's been. And so the and and you asked about mix. Mix can definitely impact rev for and it does. But in the numbers we're seeing today, it actually didn't. Um, we you know, it was the mix.

Exactly, really close to exactly what we had expected to see. So, what's really driving the underlying trend of our higher moving rents?

Analyst: That's it for me. Thank you.

And then continue to strengthen our internal rent increases, uh, and so that that's, uh, something we'll stay very focused on and we're trying to pull both levers and we want to see occupancy and rate, grow, and we've made the best connection recently of both moving together.

Debra Cafaro: Thank you.

That's it for me. Thank you.

Bella: Your next question comes from the line of Vikram Malhotra with Mizuhu. Please go ahead.

Thank you.

Analyst: Hi, this is Georgi on the phone with Vikram. Thank you for taking my question. Just curious, how did the change in the same-store pool impact your same-store growth during the quarter? And then the 21 assets changed in the pool, were they part of the group that experienced occupancy losses in March?

Your next question comes from the line of vicram mehrotra with mizuho. Please go ahead.

Justin Hutchens: Hi, it's Justin. So first of all.80%

Hi, this is Georgie from Vikram. Thank you for taking my question. I'm just curious, how did the change in the same-store pool impact your same-store growth during the quarter? And were the 21 assets changing in the pool part of the group that experienced occupancy losses in March?

Bella: of our community or of our shop NOI is in the same store pool. So it's a great reflection of the performance of the portfolio. So any way you look at it, it's a reflection of the performance of the portfolio. So that's the first part. You know, the second part, there was absolutely no relationship at all whatsoever between the communities that we transitioned to some move-outs that we experienced earlier in the year. So no there. But since we're on the topic, let me just talk about what we transitioned. So we transitioned communities to an operator. If you met with us at NAIRI, you probably heard us talk about Discovery Senior Living. And they had had 45 communities with us. They'll be much higher as we go throughout the year because they're going to be in the 60s with the recent transition.

Hi, it's Justin. So first of all, 80% of our community of our shop. Noi is in the same store pool. So it's a great reflection of the performance of the portfolio, so any way you look at it, it's a reflection of the performance of the portfolio. So

that's the first part. Um, you know, the second part, um, there was absolutely no relationship at all whatsoever between the communities that we transitioned to, to move out to be experienced during the year. So, um, no there. But since we're on the topic, um, let me just talk about what we transition. So we we transition communities to an operator. If you met with us at NY, you probably heard us talk about Discovery, Senior Living,

Bella: They have 30 years of experience. They're a large operator, but they manage multiple local brands. And so one of the things I like about them is the talent pool they have close to the field is good, if not better, than anybody in the industry. And they operate communities for us in at least five of their different brands. And we're really excited to get more communities in their hands because they've delivered outsized results for us. And that was really the plan. It's just to really, we're always tinkering with 5% to 10% of our portfolio through management transitions. It's part of the strategy we have of right market, right asset, right operator. Get the right operators in place in the right communities. And we saw an opportunity, so we took it. We're looking forward to great results with Discovery.

Um, and they had had 45 communities with us. Um, they'll be much higher as we go throughout the year because they're going to be in the 60s with the the recent transition

They have 30 years of experience, they're a large operator, but they manage multiple local Brands. And so 1 of the things I like about them is the talent pool. They have close to the field is, is good. If not better than anybody in the in the industry. And and we're they operate.

Unknown: That's helpful. Thank you. And just another quick one for me. How things are shaping up for the Brookdale transition and what should we assume for the fall of NOI in the fourth quarter within the triple net segment before we get the 16 million rent bump in one Q26?

Communities for us and at least 5 of their different brands and we're really excited to get more communities in their hands because they've delivered outside as results, um, for us. Um, and that's what that was really the plan. It it's just a really we're always tinkering with 5 to 10 of our portfolio in through management transitions. It's a, it's part of the strategy we have of right market, right asset right. Operator gets it, right? Operators in place, and the right communities and we saw an opportunity. So we took it. We're looking forward to Great results with discovery.

Bella: I'll take the first part and then Bob, you help me with the second part. So on the first part, the Brookdale transition, you know, this is the conversion of 45 communities from the triple net to the shop structure, one of our favorite strategies because it takes assets we already own that have lower occupancy, puts it in shop. These are 78% occupied. They happen to be in really strong markets and they have opportunity through refresh CapEx to be better positioned and they're good fits for five operators that we selected to transition. So the NOI growth opportunity that we've been talking about is really more of a long-term comment, which is 2X the run rate that they had in late last year. And so we think we'll double the NOI. It was around 50 million at the time. We think it goes to 100 million.

That's helpful. Thank you. And just another quick 1 for me, how things are shaping up for the Brookdale transition? And what we, what should we assume for the fall and align the 4 quarter, uh, within the 3.8 segment, before we get the 16 and bumping, 1q 26.

I'll take the first part and then Bob how can I help you with the same part? So on the on the first part, the uh, the Brookdale transition, um, you know, this is the conversion of 45 communities from the triple net, to the shop structure 1 of our favorite, you know, strategies because it takes assets, we already own, they have lower occupancy. Puts it in shop. These are 78% occupied, they happen to be in really strong markets and they have opportunity through refresh capex to be better positioned.

Mentioned and they're good fits for 5 operators that we've selected to transition. So the noi growth opportunity that we've been talking about is really more of a long-term comment, which is, you know, 2x, um, the, uh,

Bella: But to answer the specific question, it's going really well. So our operators are already fully engaged with all of the communities. We'll start having transitions happen in the upcoming months. And by the end of the year, everything, if not almost everything, everything, or close to everything, I should say, will have been transitioned. And Brookdale has been good to work with and all the new operators are very excited about working with the new communities. So I'd say so far, so good.

The Run rate that they had in late last year. Um, so we think we'll double the noi. It was around 50 million at the time we think it goes to 100 million.

But the to answer the, the, the specific question it's going really well. So our operators are already fully engaged with all of the communities, we'll start having transitions happen in the upcoming months. Um, and by the end of the year,

Everything if not almost everything everything.

Bob Probst: I would just say that in terms of modeling in the fourth quarter, we'll start sprinkling in the shop assets from the conversion on the 45. But the financial impact really is not until 26, frankly. The majority, vast majority, is triple net for the year and that's how it's modeled.

Or close to everything. I should say we will have been transitioned, and you know Brookdale's been good to work with. All the new operators are very excited about, you know, working with the new communities. So I'd say so far, so good.

I would just add in terms of modeling in the fourth quarter, we'll start sprinkling in the shop assets from the conversion, on the 45.

Unknown: Great. Thank you very much.

Um, but the financial impact really is not until 2026, frankly. Um, the majority, the vast majority is triple net for the year, and that's how it's modeled.

Vijay Grant: Thank you. Your next question comes from the line of Seth Aberge with the City. Please go ahead.

Great, thank you very much.

Thank you.

Debra Cafaro: Thanks for taking my question. You know, you kind of talked about the operating leverage in the business and the incremental margin opportunity as occupancy continues to grow. Do you have a sense of how much of a margin expansion in the shop portfolio is a result of occupancy gains versus, you know, execution and the opportunity that you guys have with the Ventas OI platform?

Your next question comes from the line of Seth Bergie with the city. Please go ahead.

Thank you for taking my question. You know, you kind of talked about the operating leverage in the business and the incremental margin opportunity. As occupancy continues to grow, do you have a sense of how much of a margin expansion in the shop portfolio is a result of occupancy gains versus, you know, execution and the opportunity that you guys have with the Ventas platform?

Bella: I mean, it's a really good question and I have to say it remains to be seen because we're entering a new era where demand is going to be, you know, the best we've ever experienced and the supply-demand dynamic will also be the best we've ever experienced. So we know a couple of things about the business. It's playing out very clearly in our portfolio. We know that if you have higher occupancy, you have better pricing opportunity. And so as we have more communities move into the higher occupancy band, we'll expect the Rev4 component to play a bigger role moving forward. We also know that given the supply-demand and the OI platform that we have and our operators working together, that we have tremendous occupancy opportunity as well. And so our platform is really designed around driving growth in both occupancy and rate.

About the business. It it it's playing out very clearly in our our portfolio. We know that if you have higher occupancy, you have

Better pricing opportunity. Um, and so as we have more communities move into the higher occupancy band, we'll expect the Rev 4 component to play a bigger role, moving forward. We also know that given the supply demand and the, the oi platform that we have and our, our our operators working together.

Bella: We think there's opportunity in both places. Our portfolio is positioned for that. So I'll have to ask you to wait and see how it plays out. You know, and we'll be driving both metrics and hopefully the margin expansion rule of thumb gets even better over time.

That we have tremendous occupancy opportunity as well. And so, our platform is really designed around driving growth in both occupancy and rate. We think there's opportunity in both places; our portfolio is positioned for that. So,

I'll have to ask you to wait and see how it plays out, you know, and uh, we'll, we'll be, uh, driving both metrics. And and hopefully the margin expansion rule of thumb gets even better over time.

Debra Cafaro: Great. And just kind of going back to occupancy, you know, last year the occupancy build from 2Q to 3Q was, I think, 140 basis points. You know, just given the strength that you've seen in July, do you think that, you know, you'll be on track to kind of surpass that? And just kind of what are the puts and takes from where you sit today to kind of hit the low end of the 12% versus the 16% on shop?

Great, I'm just kind of going back to occupancy. Um,

you know, last year, the occupancy build from 22 to 32 was, I think, uh, 140 basis points, you know, just given the strength that you've seen, um, in July, do you think that, you know, you'll be on track to kind of surpass that, um, and just kind of what are the puts and takes from where you sit today, to kind of Hit the low end of the, the 12% versus the 16%.

Bella: Okay. So on the occupancy, you know, the best I can tell you is that, you know, is the July number I shared earlier, which is, you know, we expect to be as good or better than the June sequential growth versus May, which is 60 bets. And, you know, we're in the kind of really the key part of the key selling season. And, you know, we have a lot to play out still, but we're encouraged by the very strong movements we had throughout the year and exceptionally strong movements we've had as of late. And then what was the second part of the question?

I'm sorry.

Um okay. So on the occupancy, you know the the best I can tell you is that you know is the July number. I shared earlier which is you know, we we expect to be as good or better than than the June sequential growth versus May which is 60 bucks.

um, and uh, you know, we're in the kind of really the

the key part of the key selling season um and uh you know we have a lot a lot to play out still but we're encouraged by the

by the very strong movements. We had throughout the year and exceptionally strong movements we've had as of late.

Bob Probst: The high end of the range.

Bella: Yeah. So the high end of the range, I'm not going to really comment on the low end of the range, but the high end of the range is really driven by two things. One is revenue growth. And that would be clearly obviously occupancy and rate moving together and having an exceptionally strong key selling season and then continued favorability in labor costs.

Um, and then what was the second part of the question? I end of the range. Yeah. So the high end of the range. I'm not going to really comment on the low end of the range, but the the high end of the range is really driven by 2, things 1 is revenue growth, um, and that would be clearly obviously I can see your rate moving together and and having a, an exceptionally strong key selling season and then continue favorability and labor costs.

Debra Cafaro: Great. Thank you.

Vijay Grant: Thank you. Your next question comes from the line of Juan Sinabria with the BMO Capital Markets. Please go ahead.

Great. Thank you.

Thank you.

Bob Probst: Hi. Good morning. Sorry to belabor the point, but just on the shop same-store occupancy, could you provide the year-over-year change for the month of June, the average or period end, just to give us a sense of higher tracking versus that full-year guidance? You know.

Your next question comes from the line of Juan Sabria with BMO Capital Markets. Please go ahead.

Hi, good morning. Um, sorry to belabor the point but just on the shop, same store occupancy, could you provide the year-over-year change for the month of June, the average or or period end? Just to give us a sense of higher tracking versus that full year guidance.

Justin Hutchens: One, I would go back to we were 240 over in the second year-over-year. We're seeing improvement in that as we go into the third quarter. And we've maintained our 270 guidance.

You want? I would go back to where we were 240 over in the second year-over-year.

Vijay Grant: And we were 290 in the first.

We're seeing Improvement in that as we go into the third quarter.

Justin Hutchens: And we were 290 in the first to complete the story. So yeah, you know, we're seeing continued improvement year-over-year in OC led by June.

And we've maintained our 270 guidance, and we were 290 in the first and we were 290 in the first to complete the story. So, yeah, you know, we're we're seeing, we continue to Improvement year-over-year.

Bob Probst: We'll leave it a mystery. Second question just on the R&I platform and the developments. Just curious on how we should think about the implications on capitalized interest and other moving pieces given, you know, a fair chunk of what was in process has now been completed.

In oh, uh, led by June.

We'll leave it a mystery. Um, second question, just on the rni platform and the developments.

Um, just curious on how we should think about the implications on capitalized interest and other moving pieces given, you know, a fair chunk of what was in process has now been completed.

Justin Hutchens: I can say capitalized interest is absolutely de minimis. So nothing to really report there. It's really about the commercial performance of the developments.

I can say it's capitalized interest is absolutely diminished. So I nothing to really report there. It's really about the commercial performance of the of the developments.

Bob Probst: Thank you.

Vijay Grant: Thanks. Your next question comes from the line of Matteo Occhisagna with Douche Bank. Please go ahead.

Thank you.

Thanks.

Bob Probst: Hi. Yes. Good morning. Again, congrats on the quarter. Debbie and team, a lot of good stuff happening with kind of the acceleration in shop. You guys are talking about increased acquisition outlook. Just kind of curious why that does not translate to also the high end of guidance being increased. I think in two quarters in a row now you've raised the low end, but you haven't really done anything on the high end. Are there things in the back half of 25 that are kind of causing some offsets, or is this some of the traditional conservatism that we sometimes see from management? Just curious your thoughts on that.

Your next question comes from the line of Mateo Aasana. With Deutsche Bank, please go ahead.

Vijay Grant: Well, just I'll take the first and turn it over to Bob. Thanks for the question. We are happy about the the results and the outlook. And so we raised guidance in May. The midpoint, we raised again now. We're looking at, you know, again, the midpoint's up. We're looking at 8%. If achieved at the midpoint, year-over-year FFO growth per share, which is pretty awesome and accelerating from 2024. And in terms of the modeling impact, Bob touched on a couple of things, but I'll he can elaborate on the specifics.

On services, and that would sometimes see from management just curious your thoughts on that.

Well, just uh, I'll I'll take the first and turn.

The results and the outlook. Um, and so we raised guidance in May.

Justin Hutchens: And maybe I'll frame it first half, second half. FFO was 171 in the first half. The midpoint would be 173 to get to the full year, 344. And that's, if you think sequentially, that growth is shop growth and partially offset by refinancing at higher rates and the dispositions of post-acute I referred to, which are a headwind in the balance of the year. So that gets you to the midpoint sort of equation. Of course, the upside is a shop upside as much as anything. And Justin talked about the components to get there.

The midpoint we raised again now we're looking at, you know, again, the midpoints up we're looking at 8% if achieved at the midpoint year-over-year, ffo growth per share which is pretty awesome and accelerating from 2024 and in terms of the modeling impact Bob touched on a couple things but I'll um he he can elaborate on the specifics and maybe I'll frame it first half. Second half um ffo was 171 in the first half the midpoint would be 173 to get to the full year 344.

And that's a few things sequentially that growth is shop growth.

And partially offset by refinancing at higher rates and the dispositions of Post Acute. I referred to which are headwind in the in the balance of the year. So that gets you the midpoint sort of equation. Of course, the upside is

Bob Probst: That's helpful. And then a quick question on Canada and the shop portfolio. Again, a big disparity in regards to shop growth in the US and Canada this quarter in particular. I mean, Canada occupancy is already at 96.5, but curious how one should kind of think about opportunities to drive further shop same-store NOI growth in Canada.

"Is a shop upside as much as anything?" Justin talked about the components they get there.

Bella: Yeah, sure. So, you know, Canada obviously does have high occupancy. It does have more occupancy opportunity. And to believe that, you just have to look at the group Marie's portfolio, which is over 98% occupied, and they have several communities that are running 100%. So the next step is for the other operators to start pushing into that territory, some more occupancy growth. One of the drivers of growth has been we have some assisted living presence in Canada with Sunrise, which is higher Rev4. So as that continues to fill, there's some growth opportunity from that perspective. And then pricing has been a little bit better there as well. So we're always focused on revenue across the board, but price is an opportunity that's emerging in Canada.

Okay, that's helpful. And then uh quick question on Canada on the stock portfolio again. A big disparity in regards to shop growth in US and Canada. This quarter in particular. I mean Canada occupancies already at 965 but curious how we're going to kind of think about opportunities to drive further shop. Uh same store. Noi growth in Canada.

Bob Probst: Thank you.

Yeah sure. So you know Canada obviously does have, I I can see it does have more occupancy opportunity, um and to believe that you just have to look at the group Maurice portfolio, which is over 98% occupied and they have several communities, that are running 100%. So, the next step is for the other operators to to, to start pushing into that territory. So more occupancy growth the um, 1 of the drivers of growth is has been, we have a some Assisted Living presence in in Canada with Sunrise, Which is higher rep for. Um, so as that continues to to fill, there's some growth opportunity from from that perspective and then pricing has been a little bit better, uh, there as well. So we, we were always focused, um, you know, and revenue across the board. But, you know, price is an opportunity that's emerging in Canada.

Vijay Grant: Thanks, Teo. Your next question comes from the line of Michael Stojak with Green Street. Please go ahead.

Thank you.

Thanks Ty.

Debra Cafaro: Thanks. And good morning. Maybe on the outpatient side. So with CMS's proposal to do away with the inpatient-only procedure list, how impactful could this realistically be in terms of health systems expanding their outpatient footprint, just given that's already been such a persistent trend for some time now?

Your next question comes from the line of Michael Sak with Green Street. Please go ahead.

Justin Hutchens: Yeah, thanks. Thanks for the question. You know, it has been a push for actually quite a while, both from the private payers as well as the government payers. But I would say it's stepped up a level or two here. And you can't read modern healthcare on any day without an article about a health system expanding their ambulatory portfolio or their integrated care network. I mean, it's clear. Government payers, private payers want to push procedures into lower cost settings.

Thanks and good morning, uh, maybe on the, uh, outpatient side. So, with cms's proposal to do away with the inpatient only procedure list, how impactful could this, realistically be in terms of health systems expanding their outpatient footprint. Just giving that already been such a persistent trend for some time now.

Yeah, thanks. Thanks for the question.

You know, it has, it has been a push for a for actually quite a while, both from the, you know, the private payers, as well as the government payers.

But, uh, I would say it’s stepped up a level or two here, and you can’t read Modern Healthcare on any day without an article about a health system expanding their ambulatory portfolio or their integrated care network.

I mean, it's clear.

Vijay Grant: And that's good for our business.

Justin Hutchens: It's great for our business.

Debra Cafaro: Got it. That makes sense. And maybe one on the post-acute portfolio. There was a nice uptick in coverage and occupancy during the quarter. Should we expect continued improvement there? And where do you ultimately expect that portfolio to stabilize?

Government payers and private payers want to push procedures into lower-cost settings, and that's good for our business. It's great for our business.

Vijay Grant: Yes. As we expected, and this is only really through the first quarter reported, as we typically do for triple net, performance is improving. That's good. And we would expect, as we add the assets that we acquired last year and occupancies increase, that performance could continue to tick up.

Got it. That makes sense. Um, and maybe one on the Post Acute portfolio. There was a nice uptick in coverage and occupancy during the quarter. Should we expect continued improvement there, and where do you ultimately expect that portfolio to stabilize?

Yes. Um, as we, uh, expected, uh, and this is only really through the first quarter reported as we typically do for triple net. Uh, performance is improving, that's good. Um, and we would expect as, uh, we, we add the assets that we acquired last year, um, and occupancies increase. That performance could continue to tick up,

Debra Cafaro: Thanks for the time.

Vijay Grant: Thank you. Your next question comes from the line of Ronald Camdim with Morgan Stanley. Please go ahead.

Most of the time.

Thank you.

Debra Cafaro: Hey, just two quick ones. Last quarter, you talked about maybe some cap rate compression on the acquisition side. Just I think acquisitions come up already, but I'd love to hear a little bit more commentary on sort of cap rate trends and IRR trends as this pipeline expands. Thanks.

Hello. Camden with Morgan Stanley. Please go ahead.

Vijay Grant: So on that front, I would say in terms of the unlevered IRRs, we're still driving toward low to mid-teens unlevered IRRs.

Hey, just 2 quick ones. Last quarter, you talked about, maybe some cap rate compression on the acquisition side. Just uh I think Acquisitions will come up already, but I'd love to hear a little bit more commentary on sort of cap rate trends and irr Trends um, as this pipeline expands. Thanks, mhm.

Bella: Yeah, and that's the key metric, this Justin. So you know the unlevered IRRs are very consistent over the last 18 months as we've embarked on this external growth run we've been on. There's obviously inputs into that. You know one of that is the year-one yield. You know another is just the growth profile of the asset. When we calculate IRRs, I think everyone knows this, we use constant cap rates on entry and exit so that the IRRs truly reflect our expectation for just the overall delivery of returns from an operational organic standpoint. So last year, we're kind of running in the mid-sevens. We're drifting a little lower, you know lower sevens year-one yields this year. It is a more competitive environment, but the profile of what we're buying is also different as well. And we are leaning in.

So, um, on that front, I would say in terms of the unlevered IRS, we're still driving toward low to mid-teens on levered IRS.

Yeah, and that's the key metric. This is Justin. Um, so, you know, the unlevered IRRs are very consistent over the last 18 months as we've been marked on this said, you know, external growth run we've been on.

The, you know, you know that.

There's obviously inputs into that you know 1 of that is the year 1 yield. You know another is just the growth profile of the asset when we calculate our RS. I think everyone knows this, we use constant cap rates on entry and exit. Um so that the r is truly reflects our expectations for just the overall you know, delivery of of returns.

the um,

From an operational and organic standpoint. So,

Last year, we're kind of running in the mid 7s. Um it we're drifting a little lower, you know, lower sevens year. 1 yields this year.

Bella: You know so you know we're getting a newer asset. We're getting even stronger markets. So I would say you know all that's working together to deliver what is our targeted unlevered IRRs of low to mid-teens.

Debra Cafaro: Helpful. And then just a quick one on operator transitions. As you sort of take a step back, I mean, what do you think you guys need to do to just unlock more of these transitions and work with the operators and so forth? Because it does look like a pretty big value creation. So I'm wondering what you think you need to do to unlock more, or is this sort of all the fruits have been picked? Thanks.

It is a more competitive environment but the profile of what we're buying is also different as well. And and we are leaning in, you know, so you know we're getting a newer asset. Um, we're getting even stronger markets. Uh, so I would say, you know, all that's working together to to deliver. What is our targeted? I'll never die our hours of low to mid teens.

Helpful and then just a quick 1 on operator transitions is you sort of take a step back. I mean, what what do you think? You know, you guys need to do is just unlock more of these Transitions and and work with the operators and so forth. Because it it does look like a a pretty big value creation.

Bella: Yeah. So it's a clear, as a large owner of senior housing and others that are as well, it's clearly part of the playbook. And what you're really doing is trying to make sure that you have the, we know we're in the right markets and we know that we have well-positioned assets and we're investing in our communities. Then we're looking for the right operator fit. And that is an ongoing process. And we may always have a few that we think could move over to a different operator where they could make more impact. And Discovery is an operator where they've proven across multiple brands and multiple geographies that they can make impact for us. We've transitioned to a lot of others as well on a selective basis. And it's all about trying to find the right fit.

Um so I'm wondering what you think you need to do to unlock more and, or is this sort of all all the fruits has been picked? Thanks.

yeah, so it it's a, you know,

It, it's a clear as a large owner, senior housing and, and others, that that are as well. It's clearly part of the, The Playbook. Um, and what you're really doing is, uh, you know, trying to make sure that you have the, we know, we're in the right markets. And and if we know that we have, well, positioned assets, and we're investing in our communities, then we're looking for the right operator fit,

And that is an ongoing process and we may always have, you know, a few that we think could be move over to a different operator. You know, where they could, you know, make more impact and Discovery is an operator where they've proven it across multiple Brands and multiple, um,

Bella: And we're really just trying to work really hard to maximize performance. And part of that is the operator component. And so step one is always to work with the operator to create the best outcome. And if we're not finding the right fit, then we'll work with someone that can in the nicest possible way. I think we've done a great job of maintaining great relationships across the board.

Debra Cafaro: Thanks so much.

Geographies, uh, that they can make impact for us. There's we've transitioned to a lot of others as well, um, on a selective basis. Uh, and it's all about trying to find the right fit and we're really just trying to work really hard to to maximize performance. And part of that is, is the operator component. Um, and so Step 1 is always to work with the operator to create the best outcome. Um, and if we're not finding the right fit, then we'll, we'll work with someone that can and it in the, in the nicest possible way. I think we've done a great job of maintaining great relationships across the board

Vijay Grant: Your next question comes from the line of Nick Yelico with Scotiabank. Please go ahead.

Thanks so much.

Debra Cafaro: Hi. Thanks for the questions. This is Elmer Chang on with Nick. I was just wondering, how should we think about timing of incremental announced transactions in the second half of the year and pricing relative to the shop assets you acquired quarter to date, given comments about rising buyer competition and the opportunity for significant growth potential within the growing pipeline?

Your next question comes from the line of Nick helico with Scotia Bank. Please go ahead.

Hi, thanks for the questions. Uh, this is Elmer Chang on with Nick.

Um I was just wondering, how should we think about timing of incremental announced transactions in the second half of the year and and pricing relative to the shop assets, you acquired quarter to date, given comments about Rising buyer competition and the opportunity for significant growth potential within you know the growing pipeline.

Bob Probst: I'll do a modeling answer. My colleagues can join from there. But we have a billion one in the bank. Two billion is the guide. We raised by a penny the guidance on the back of investments. And that's really both volume and timing, i.e., earlier timing and higher volume. Obviously, there's only six months left to go. So the contribution of the increment is smaller. And the returns are very similar to that, which we've done. That's how I would model it.

Uh, I'll do a modeling answer. Um, my colleagues can join from there, but we have $1 billion in the bank. Um, $2 billion is the guide.

We raised by a penny the guidance on the back of Investments and that's really both volume and timing. I earlier timing and higher volume

Vijay Grant: The incremental 500 would typically be more back-end weighted.

Obviously there's only 6 months left to go. So the the contribution of the increment is is smaller. Um and the returns are very similar to that which we've done. Um that's how I would model it.

Bob Probst: More back-end weighted.

Vijay Grant: Yeah. And then in terms of character, it's very consistent with what we've been doing. So we're happy about that.

Debra Cafaro: Okay. Thank you. And then second question. And then second question is, for the small percentage of pre-revenue biotech tenants within your resort portfolio, what's the sense that you get from those tenants in terms of whether the capital raising environment has improved or worsened in the last couple of quarters? And do you expect any downside risk? Maybe that's not factored into guidance that could arise in the second half.

The incremental 500 would typically be more back-end weighted or back in weighted. Yeah. And then in terms of character, it's it's very consistent with what we've been doing. So we're happy about that.

Okay, thank you. And and then second question.

And then second question is uh, for the small percentage of pre-revenue Biotech tenants with within your resource portfolio, uh, what's the sense that you get from those tenants in terms of whether the capital raising environment has improved or or worse in, uh, in the in the last couple of quarters and do you expect any downside risk? Um, maybe that's not factored into guidance that could arise in in the second half.

Vijay Grant: Yeah. I mean, any downside risk that we would be aware of, it would already be factored into guidance. And then in terms of the fundraising environment, there are some glimmers, I would say, but you know there's a way to go to overcome kind of the macro factors for that sliver of tenancy. We are seeing some tenants raise venture capital money. We've seen different royalty-type deals, but those are generally for more mature companies. So there's a way to go, but a few glimmers.

yeah, I mean any downside rate

would already be factored into guidance um and then in terms of the fundraising environment um there are some

Glimmers I would say. But the, you know, the there's there's a way to go to overcome kind of the, the macro factors for that sliver of tenancy. We are seeing some

You know, tenants raise Venture Capital money, we've seen different, you know, royalty type deals, but those are generally for for more mature companies. So there's a way to go, but a few glimmers

Debra Cafaro: All right. Thanks so much.

Vijay Grant: Thank you. Your last question comes from the line of Mike Mouillier with JP Morgan. Please go ahead.

Right. Thanks so much.

Thank you.

Bob Probst: Yeah. Hi. Just a quick one. Justin, I think you mentioned that IL occupancy trends have been better than the averages. So how does it compare when you're talking about Rev4 growth when you're comparing IL versus AL? Is that dynamic kind of similar as well?

Your last question comes from the line of my earlier with JP Morgan. Please go ahead.

Bella: Yeah. So both price and volume have been good in IL. One thing that you have to remember about independent living is it doesn't have the care component. And so you know there's a frictional aspect of assisted living when you have someone that moves out on higher acuity. They're paying more. And so you're replacing that. And there's a releasing spread impact from that. The independent living portfolio doesn't participate in that process because they don't deliver care. So you're really just replacing rents. And you know moving rent trends have been good in independent living. We have a range of different independent living products. You know some are more price-sensitive than others. But generally, price has been good. But it's been, I'd say, you know a better result on the volume side. And that's where we're focused.

Yeah. Hi just a quick 1. Uh Justin, I think you mentioned that I will occupy Trends have been better than the averages. Um so how does it compare when you're talking about rev ports? When you're comparing IL versus Al is that Dynamic you know similar as well.

Yeah so um both um price and um volume have been good in iel. 1 thing that you you have to remember about Independent Living is

Um, it doesn't have the care component. Um, and so, you know, there's a frictional aspect to assisted living. When you have someone that moves out on higher acuity, they're paying more, so you're replacing that. And there's a releasing spread impact from that. The independent living portfolio doesn't, um, you know, participate in that process because they don't deliver care. So, you’re really just replacing rents.

Um, and you know, moving around Trends has been getting Independent Living.

Bella: Because like I said, most of our US portfolio that is upside is around 84% occupied in independent living. And so we're really leaning in there to try to drive occupancy up and get to the point in time where you're benefiting from that operating leverage we talked about earlier.

Uh, there there's uh we have a range of different Independent Living Products, you know, some are more price sensitive than others, but generally, uh, price has been good. But it's been, I'd say, you know, a better result on the volume side and that's where we're focused. Because like I said that, you know, our most of our us portfolio that is upside is around 84% occupied, independent living, and so, we're

really leaning in there to try to to drive occupancy up and

Vijay Grant: Yeah.

Bob Probst: Got it. Okay. Thank you.

Vijay Grant: Good. Yeah. So BJ, any more questions?

Get to the period to the point in time where you're benefiting from that operating leverage, we talked about earlier. Yeah.

Got it. Okay, thank you, good.

Yep.

Debra Cafaro: No.

Vijay Grant: Okay. Well, on behalf of all of us at Ventas, I want to thank you for your interest in the company. We hope you and yours have a safe and happy rest of the summer. And we look forward to seeing you in the fall. That concludes today's call. Thank you all for joining. You may now disconnect. Everyone, have a great day.

So BJ, any more questions?

Okay, well on behalf of all of us at fentes. I want to thank you for your interest in the company. We hope you and yours have a safe and happy rest of the summer and we look forward to seeing you in the fall.

that concludes today's call thank you all for joining you may now disconnect everyone have a great day